Previously rejected MEG Energy bidder Strathcona Resources intends to buy an additional 5% stake in MEG and vote these shares and the existing 9.2% stake against the Cenovus acquisition offer for MEG, as the latest major Canadian deal faces hurdles towards completion.
Last week, Cenovus Energy announced it has entered into a definitive arrangement agreement to acquire MEG Energy Corp in a cash and stock deal valued at US$5.7 billion (C$7.9 billion), including assumed debt.
The agreement between Cenovus and MEG came after a months-long saga in which suitors have sought to buy MEG Energy.
Earlier this year, Strathcona Resources made an unsolicited offer to acquire MEG Energy, but MEG’s board rejected the offer and advised shareholders to reject it too and not tender their shares.
MEG’s board said in June that the share consideration in Strathcona’s offer exposes shareholders to a company with inferior assets, and that “MEG is a uniquely attractive investment opportunity that warrants a premium valuation.”
At the time, MEG initiated a strategic review of alternatives with the potential to surface an offer superior to its standalone plan.
Last week, MEG agreed to be acquired by Cenovus in a deal that will consolidate adjacent, fully contiguous, and highly complementary assets at Christina Lake.
The transaction has been unanimously approved by the boards of both companies. Cenovus expects the acquisition to close in the fourth quarter of 2025, subject to regulatory approvals and approval of the transaction by MEG shareholders.
MEG’s board recommends MEG Shareholders vote FOR the transaction at a special meeting to be held on October 9, 2025.
However, the rejected Strathcona is now putting up a fight and said this week that it intends to purchase an additional 5% in MEG, subject to market conditions. Together with the current 9.2% stake in MEG, Strathcona expects to have 14.2% in the target company.
“Following discussions with fellow MEG shareholders over the past week, Strathcona intends to vote its MEG Shares (including those it currently holds and subsequently acquires) against the resolution to approve the acquisition of MEG by Cenovus Energy Inc., which requires approval by at least 66 2/3% of the votes cast by MEG shareholders,” Strathcona said.
By Tsvetana Paraskova for Oilprice.com
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