Canadian Oil Sands Ltd. says it has held talks with more than 25 parties and that it needs more time to weigh possible bids as it seeks to fend off Suncor Energy Inc.'s hostile takeover.
Financial advisers for Canadian Oil Sands told regulators the company had signed confidentiality agreements with four unnamed parties it calls "highly credible" as of Nov. 19, and that one or more rival offers could emerge if potential bidders are given more time.
The company has met with one unnamed party and is scheduling meetings with prospective acquirers over the next two weeks, according to an affidavit filed with the Alberta Securities Commission (ASC). But it stopped short of saying a rival bid was imminent.
"I firmly believe that with more time to run our process, there is a good prospect for one or more counterparties to make a proposal," Jamie Anderson, deputy chairman of RBC Dominion Securities Inc., which is representing Canadian Oil Sands, said in the document.
The largest owner in the Syncrude Canada Ltd. project is touting interest from possible bidders ahead of a showdown over a shareholder rights plan it adopted that called for 120 days to review takeover bids. That would extend the window to drum up a competing offer to early February.
Canadian Oil Sands shares had rallied as much as 4 per cent on the Toronto Stock Exchange Wednesday before retreating to close at $8.90.
It was up just less than 1 per cent, suggesting investors weren't entirely convinced another suitor is at hand.
Calgary-based Suncor launched the unsolicited play for its partner in the Syncrude project in early October, seeking to take advantage of the 60-per-cent plunge in U.S. and global oil prices to beef up its 12-per-cent ownership stake in the aging oil sands plant.
It has urged the ASC to reject the Canadian Oil Sands poison-pill defence, arguing the 60 days it gave the target is ample time for investors to review its $4.5-billion offer.
A Suncor spokeswoman declined to comment further, saying the company would make its arguments Thursday before the ASC. Its offer is set to expire on Dec. 4. Suncor shares fell 40 cents on the TSX Wednesday, about 1 per cent, to $36.60.
The spat is seen as a test case for proposed new rules in Canada that would extend the period to consider takeover bids to four months, up from the current 35-day minimum.
A ruling could come as early as Friday afternoon, a person with knowledge of the proceedings said.
Suncor has offered 0.25 of one of its shares for each Canadian Oil Sands share.
Suncor chief executive officer Steve Williams has touted support from a "majority" of the target company's shareholders and warned that a rejection of the offer could trigger a collapse in Canadian Oil Sands shares.
For its part, Canadian Oil Sands has rejected the approach, calling it opportunistic and saying it undervalues its prospects.
The company's sole asset is its 37-per-cent ownership share of the Syncrude venture.
In disclosures to the ASC, Mr. Anderson said Canadian Oil Sands requires additional time to arrange site visits with interested parties and for other negotiations.
A data room has been open since Oct. 18, giving would-be acquirers access to financial and operating information, he said.
But more time is needed to obtain consent from the other partners in the Syncrude venture in order to share proprietary information about the company's upgrading operations, he said.
Canadian Oil Sands is also scheduled to release its 2016 budget next week, offering a clearer picture of its outlook for the year ahead.
Some analysts have cited Syncrude's existing owners, including Imperial Oil Ltd., as the most likely candidates to launch a rival bid.
Imperial owns 25 per cent of Syncrude.
However, there are mixed views about whether a competing offer will materialize.
The prospect of a white knight emerging is "maybe 50-50 at this point," said Laura Lau, portfolio manager at Brompton Funds in Toronto.