Osum Oil Sands Corp.'s Orion facility.Handout
Osum Oil Sands Corp. is asking Alberta’s securities regulator to halt Waterous Energy Fund’s unsolicited bid for a majority stake in the company, arguing its financing arrangements are inadequate and that it failed to provide an independent assessment of value.
Waterous, which has a 45-per-cent stake in the privately held oil sands developer, has offered $2.40 a share to push its interest to as much as 85 per cent. Osum has urged investors to reject the offer, worth up to $126-million, saying it undervalues its assets and prospects.
Osum chairman Bill Friley said the company believes Waterous’s acquisition financing is subject to conditions that could prevent it from being able to buy the shares. In addition, the suitor has access to information about the company that has not been available to all shareholders, he said in a statement on Friday.
“As a result, if and when Waterous is able to arrange adequate acquisition financing and decides to make a new offer, we believe that a valuation conducted by an independent third party is required,” Mr. Friley said.
Osum is asking the Alberta Securities Commission to cease-trade the offer and hold a hearing.
In an e-mail, Waterous chief executive Adam Waterous called the application “nonsense,” and said his fund would reply “in due course.”
Waterous announced the bid in early November. It followed the initial acquisition of shares in the summer, a deal that gave it four of the nine board seats. Waterous says it has a deal in hand to sell a royalty interest in Osum’s production to another company.
The offer expires on Feb. 24, 2021, unless it is extended or withdrawn.
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Jeffrey Jones