Canadian oil producer MEG Energy Corp. postponed a shareholder vote on a C$7.6 billion ($5.4 billion) takeover proposal by Cenovus Energy Inc. until next week to give it time to disclose more information on asset sales.
MEG Chairman James McFarland adjourned an investor meeting on Thursday evening in Calgary after hours of delay, announcing that it will be held instead on Nov. 6. The move ended a bizarre day that saw McFarland defer a vote that had been scheduled for 9 a.m. Calgary time because of a regulatory matter that the company wouldn’t explain.
It’s the third time MEG has had to set a new date for the meeting. MEG shares fell 1.1% to close at C$29.48 in Toronto.
Cenovus’s deal for MEG is set to unite two of the larger crude producers in Canada’s oil sands region, but the transaction has been filled with twists. On Monday, the companies announced that Cenovus was changing its offer for a second time — this time boosting it to C$30 in cash or 1.255 Cenovus shares for each MEG share — in order to secure the support of MEG’s biggest shareholder, Strathcona Resources Ltd.
As part of that announcement, Cenovus said it will sell some assets, including heavy oil production in Saskatchewan, to Strathcona for C$150 million. MEG shareholders, who are being offered Cenovus shares, will now get more time to evaluate information on that side deal.
The new deadline for submitting votes by proxy is the morning of Nov. 5, McFarland said.
Shareholders will be voting after a five-month battle for MEG, an oil sands producer that produces about 100,000 barrels a day of crude from its Christina Lake site in northeast Alberta. Strathcona had kicked off the bidding war in May with an unsolicited bid that was opposed by the MEG board.
Strathcona, owner of 14% of MEG shares, then pledged to oppose the Cenovus deal. That forced Cenovus to boost its offer twice and MEG to delay a shareholder vote that was supposed to happen in the first half of October.
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