Suncor Energy Announces Successful Acquisition of 72.9% of Canadian Oil Sands Shares

Suncor announced today that approximately 72.9 per cent of Canadian Oil Sands shares ("COS") equating to 353,307,264 common shares and accompanying rights have been tendered to Suncor's Offer.

Suncor will take up all tendered shares and those shares will be paid for in accordance with the terms of the Offer, initially made October 5, 2015 and most recently amended January 22, 2016. All shares tendered were held by "Independent Shareholders" as such term is defined by the COS shareholder rights plan dated December 31, 2010 as amended April 30, 2013 (the "COS Rights Plan").

"We're pleased with the strong level of support from COS shareholders," said Steve Williams, president and chief executive officer. "From the outset, we've spoken about the excellent value this offer creates for both COS and Suncor shareholders and I'm looking forward to delivering on that commitment."

In accordance with the "Permitted Bid" requirements of the COS Rights Plan and the terms of the Offer, Suncor has extended its Offer to Monday, February 22, 2016 at 5:00 p.m. MT (7:00 p.m. ET) so that COS shareholders who have not yet tendered their shares can do so. Further extensions beyond February 22, 2016 are not anticipated.

COS shareholders who tendered to the Offer will receive 0.28 of a common share of Suncor for each share, which will be paid in accordance with the terms of the Offer. Based on the closing trading price of Suncor's common shares on the Toronto Stock Exchange on February 5, 2016, the Offer represents an implied acquisition price of $8.93 per Share.

Shareholders who have tendered their shares by February 22, 2016, provided they continue to hold Suncor common shares on the record date, will be entitled to receive Suncor's dividend of $0.29 per share on its common shares payable March 25, 2016 to Suncor shareholders of record on March 4, 2016.

Shareholders who do not tender by the new expiry date and whose shares are ultimately exchanged for Suncor common shares will not be entitled to receive this dividend as the completion of the subsequent acquisition transaction is not anticipated to occur until after the dividend record date. As COS has suspended its dividend, holders of Shares who do not tender to Suncor's Offer will not be entitled to a dividend for the first quarter of 2016 from either COS or Suncor.

Given the number of shares taken up, Suncor will complete a subsequent acquisition transaction to acquire the remaining shares. The timing and details of such transaction will depend on a variety of factors, as described in the amended offer to purchase and take-over bid circular. However, in all cases, in the event that such a transaction is completed, all shares that remain outstanding will be acquired at the same price of 0.28 of a common share of Suncor per Share. Completion of such transaction may require up to 60 days or potentially longer from the expiry of the Offer. As Suncor now exercises control and direction over greater than 66 2/3% of the outstanding shares, it is in a position to ensure the successful outcome of any shareholder vote in respect of such a subsequent acquisition transaction.

As a result of Suncor taking up and paying for approximately 72.9% of the issued and outstanding COS common shares today, Suncor is able to ensure that a subsequent acquisition transaction will be completed and Suncor will acquire the remainder of the outstanding COS shares. As a result, Suncor intends for the Offer and the subsequent acquisition transaction to be treated as a reorganization for U.S. federal income tax purposes. If the Offer is so treated, a U.S. resident COS shareholder generally will not recognize gain or loss for U.S. federal income tax purposes on the exchange of COS shares for Suncor shares pursuant to the Offer. The determination of whether the exchange pursuant to the Offer or any subsequent acquisition transaction will qualify for such treatment depends on the resolution of complex issues and facts, and there is no assurance that the exchange pursuant to the Offer or any subsequent acquisition transaction will qualify for such treatment. The foregoing is a brief summary of U.S. federal income tax consequences only and is qualified by the description of U.S. federal income tax considerations in Section 19 of Suncor's original Offer and Circular dated October 5, 2015, "Certain United States Federal Income Tax Considerations".

Source: Suncor Energy Inc.
Date: Feb 6, 2016