Canadian Oil Sands Ltd. recommended its shareholders reject a hostile, 4.47 billion Canadian dollar (US$3.46 billion) takeover offer from Suncor Energy Inc., calling the bid opportunistic and saying it undervalues the company.

The formal rejection Monday comes less than two weeks after Canadian Oil Sands adopted a so-called poison pill plan in response to Suncor's all-stock offer.

In a letter, Canadian Oil Sands offered 15 reasons shareholders should reject the offer, including that it "substantially undervalues" the company's key Syncrude oil-sands asset and arguing that the timing is opportunistic due to "unprecedented conditions" in the energy industry.

Suncor is offering 0.25 of a share for each Canadian Oil Sands share, valuing Canadian Oil Sands' shares at C$9.22 each based on closing prices Friday.

Suncor, Canada's biggest oil and gas producer, launched its hostile offer two weeks ago in an effort to boost its oil-sands presence at a time when oil prices have slumped to six-year lows.

The bid faced early headwinds when Canadian Oil Sands adopted its poison-pill plan and some shareholders came out against the offer.

Canadian Oil Sands, with a 37% stake, is the largest owner of the Syncrude mining consortium. Exxon Mobil Corp.'s Canadian subsidiary, Imperial Oil Ltd., owns a 25% interest and operates Syncrude, while Suncor holds a 12% share. Four other oil companies own smaller interests.

Write to Judy McKinnon at judy.mckinnon@wsj.com

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(END) Dow Jones Newswires

October 19, 2015 08:05 ET (12:05 GMT)

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