An earlier bid for COS was worth more on paper but rejected by the board. (Jason Franson/Canadian Press)

Canadian Oil Sands has once again urged its shareholders to reject a takeover offer by Suncor Energy, saying the purchase price is "undervalued" at around $4.5 billion.

The board of COS, whose main asset is a stake in the Syncrude oilsands project, sent a letter to shareholders urging them to reject an offer from Suncor that would give them 0.25 Suncor shares for every COS share.

"Our shareholders are telling us that now is not the time to sell. Not when oil prices are at historic lows," the letter reads.

The COS board says the company can weather prolonged low oil prices on its own and thrive once crude recovers.

Suncor, which describes its offer as a "premium" for COS shares, says its offer expires on Jan. 8. Based on current stock valuations, Suncor's offer values COS at about $4.5 billion.

Suncor went over the head of COS's board and straight to shareholders only after being previously rebuffed by the board with a friendly offer that was worth more on paper.

Both companies are partners in the massive Syncrude oilsands mine north of Fort McMurray, Alta. — Suncor with 12 per cent and COS with 37 per cent.

Suncor is one of Canada's biggest energy companies, with vast holdings in the oilsands and thousands of employees. COS, on the other hand, has a staff of about 30 and relies on its Syncrude stake as its sole asset.