IMO Imperial Oil Limited

CALGARY, Alberta—Canada's largest oil producer hasn't ruled out increasing its offer to buy rival Canadian Oil Sands Ltd., Suncor Energy Inc.'s chief executive said Monday, just days ahead of a self-imposed deadline for a takeover deal.

Canadian Oil Sands shareholders have until Friday to accept Suncor's offer of 0.25 of a share for each share of the oil-sands producer, a deal currently valued at about 4.28 billion Canadian dollars ($3.09 billion). Suncor so far has resisted requests to sweeten its bid, which Canadian Oil Sands' board and at least one large institutional shareholder have repeatedly rejected as inadequate.

Suncor Chief Executive Steve Williams said the offer remains fair, especially since crude-oil prices have continued to fall after making its bid in early October, but indicated Suncor hasn't completely shut the door on additional incentives to win over more shareholders.

"It's highly improbable (but) I wouldn't rule anything completely in or out," Mr. Williams said in an interview.

Canadian Oil Sands, the largest owner of the giant Syncrude oil sands mining consortium, issued a statement on Monday calling Suncor's offer "substantially undervalued" and asking shareholders to allow it to remain an independent company.

Canadian billionaire Seymour Schulich, who owns a 5.2% stake in the company, has said he strongly opposes Suncor's bid.

Suncor has said it would consider the bid successful with at least two-thirds of Canadian Oil Sands' shares tendered. Mr. Williams said a deal might proceed with slightly less than that level of support, but that Suncor's offer would lapse if it can't take full ownership.

"Part of my work over the weekend is going to be sitting down with the team and deciding whether we've got above the number, or close enough to the number, that we are fully confident we can close the deal," he said.

The executive said he expects to announce early next week whether or not the company will proceed with the buyout of Canadian Oil Sands.

Suncor originally said its offer would expire in early December, but the Alberta Securities Commission ruled last month—immediately before the deadline—that Suncor must extend it through at least Jan. 4 to allow shareholders more time to vet the bid and consider any other competing offers. Suncor then said it would accept shares until Jan. 8.

So far no rival bids have been disclosed to the public, but documents filed to the Alberta securities regulator in support of Canadian Oil Sands indicated that four "highly credible parties" had expressed interest in the company as of mid-November.

Suncor seeks to consolidate its position in the Syncrude joint venture by taking over Canadian Oil Sands' 36.7% stake. Suncor currently owns 12% of Syncrude. Exxon Mobil Corp. controls a 25% stake through its Canadian subsidiary Imperial Oil Ltd., which is the primary operator of Syncrude's oil-sands mines in northern Alberta.

Mr. Williams said he doesn't anticipate any friction with Exxon over Syncrude's operations if Suncor succeeds in its bid. "We will work very closely with them to bring our knowledge to bear, and I think we can help them," he said.

Write to Chester Dawson at chester.dawson@wsj.com

(END) Dow Jones Newswires

January 04, 2016 15:55 ET (20:55 GMT)

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