Canadian Oil Sands rises on acquisition chatter

CALGARY, Alberta, Jan 30 (Reuters) -

Shares of Canadian Oil Sands Trust COSUN.TO, the biggest shareholder in Syncrude Canada Ltd, rose as much as 5.7 percent on Friday, on rumors
that the company could become an acquisition target.

Units of the trust, which holds a 37 percent stake in
Syncrude, the world's biggest oil sands producer, rose 77
Canadian cents to C$19.28 midday on the Toronto Stock Exchange.
Earlier they touched C$19.55.
The units have fallen 47 percent over the past 12 months.

Rumors have begun circulating that the company may be an
acquisition target, with Imperial Oil Ltd IMO.TO, Syncrude's
No. 2 shareholder, seen as a potential buyer for the trust,
though analysts said the possibilities of such a deal for the
C$9.3 billion ($7.5 billion) trust were remote.

"It would be stretch," said William Lacey, an analyst at
FirstEnergy Capital. "Imperial is pushing ahead with Kearl, and
they are pretty debt adverse." Kearl is the company's C$8 billion oil sands project
Gordon Wong, a spokesman for Imperial, Canada's biggest oil
explorer and refiner, declined to comment on the speculation.

Analysts say investors may be looking for the next takeover
target in Canada's oil sands following the unsolicited C$617
million bid for UTS Energy Corp UTS.TO that French oil major
Total SA TOTF.PA launched earlier this week to grab a 20
percent stake in the Fort Hills oil sands project.

"UTS started the whole expectation of 'who's next?'," said
Phil Skolnick, an analyst at Genuity Capital Markets.
The rise in Canadian Oil Sands units also came despite a
big cut in the trust's quarterly payout to investors announced
earlier this week. The trust cut its distribution to 15
Canadian cents from 75 Canadian cents because of falling oil
prices.