Canadian Oil Sands' poison pill preempts reforms

Author: Edward Price | Published: 2 Dec 2015

The Alberta Securities Commission (ASC) has ruled that Canadian Oil Sands’ (COS) second shareholder plan, a response to an unsolicited bid by Suncor Energy, is valid for 90 days. 

It's longer than the typical 45-60 days but shorter than new proposals for 120 days, and comes at a time when local regulators are considering the future of hostile bids.

Canada is considered a bidder-friendly jurisdiction. While hostile bids are a fairly rare event in Canada, they are often successful as boards have little time to react to unsolicited bids. 

But changes are underway. In March the Canadian Securities Administrators (CSA) proposed amendments to the rules on hostile bids, including extending the minimum bid period from 35 to 120 days. The proposals are expected to come on stream mid-2016 and would allow target companies more time to find alternative bidders.

Suncor made its C$4.7 billion bid in October, and...