Cenovus raises MEG offer, wins Strathcona support
Global News
Cenovus Energy Inc.'s takeover of MEG Energy Corp. appears poised to win shareholder approval later this week after the oilsands giant raised what it had said was its "best and final" offer and secured the support of one-time rival Strathcona Resources Ltd.
CALGARY – Cenovus Energy Inc.’s takeover of MEG Energy Corp. appears poised to win shareholder approval later this week after the oilsands giant raised what it had said was its “best and final” offer and secured the support of one-time rival Strathcona Resources Ltd.
The sweetened offer announced Monday, made up of half cash and half stock, is worth $30 a share based on Cenovus’ closing stock price on Friday. Earlier, it had offered $29.50 in cash or 1.240 of a Cenovus share, worth $29.65 as of Friday
MEG shareholders are to vote on the offer, which has the support of that company’s board, on Thursday. The meeting had been scheduled for last week, but was delayed after it appeared the approval vote might have fallen short of the required two-thirds majority.
But Strathcona, which recently dropped its own hostile all-stock offer for MEG, now says it intends to vote its 14.2 per cent stake in favour of the new Cenovus offer.
“With Strathcona’s support, MEG currently expects that approximately 79 per cent of the MEG shares represented by proxy or expected to be voted in person at the meeting are for the approval of the improved Cenovus transaction,” MEG said in a statement.
Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta., and the companies have touted the cost-savings and efficiencies that would result from joining forces. Strathcona also has steam-driven operations in the region.
Also Monday, Cenovus announced the sale of its Vawn thermal heavy oil operation in Saskatchewan and certain undeveloped land in western Saskatchewan and Alberta to Strathcona for $150 million including $75 million in cash paid on closing and up to $75 million more, depending on future commodity prices.
Strathcona executive chairman Adam Waterous declined to comment further on Monday.
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