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Cenovus Energy on Monday further sweetened its bid for MEG Energy to C$30 a share, winning long-sought backing from MEG’s largest shareholder, Strathcona Resources.
Earlier this month, Cenovus had already raised its offer for MEG to about C$29.80 per share, and said it was its “best and final” offer, in an attempt to outbid Strathcona’s offer for Canada’s last large pure-play oil sands company.Following the revised offer, Strathcona, which had raised its stake to 14.2% in MEG and intended to vote against the Cenovus transaction, abandoned its takeover bid.
MEG said it now expects around 79% of votes to approve the improved transaction, following Strathcona’s decision on Monday to back the deal with its 36.1 million shares.
The board had repeatedly urged shareholders to reject Strathcona’s bid, calling it “fundamentally unattractive”, and reaffirmed its support for Cenovus’s offer.
MEG’s Christina Lake oil sands project remains a coveted asset for its long reserve life, low operating costs and potential for production growth.
The shareholder meeting on the transaction is expected to be held on October 30, which was postponed from October 22. The deal requires approval by two-thirds of shareholders.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Vijay Kishore)
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