MEG Energy Spurns New Strathcona Bid, Backs C$7.9 Billion Cenovus Tie-Up

By Adriano Marchese

MEG Energy's board has once again recommended its shareholders reject a new bid from Strathcona Resources, which last week increased its offer as it looks to outbid rival Cenovus Energy.

The Canadian energy company said Monday that it recommends its shareholders to vote in favor of the 7.9 billion Canadian dollar, or roughly $5.71 billion, deal with Cenovus, and to reject the Strathcona proposal. On Friday, Strathcona reaffirmed is willingness to engage constructively and in good faith with the MEG board.

Strathcona is currently offering to acquire all the shares it doesn't currently own for 0.80 of a common share of Strathcona for each MEG Energy share. The offer represents about C$30.86 per MEG Energy share.

In May, Strathcona began its pursuit of MEG, putting in an offer which the MEG board advised for the first time to its shareholders not to accept. MEG later accepted a C$7.9 billion buyout offer from Cenovus.

Strathcona said that its new offer represents an 11% premium over Cenovus' offer and delivers an over 25%-per-share accretion to MEG shareholders on all key metrics through their 43% pro forma ownership of Strathcona.

Strathcona has been buying up MEG Energy shares to position itself to oppose rival Cenovus' buyout of the Canadian oil sands producer. Most recently, it acquired 6.03 million shares of MEG, taking its stake to 14.2% for about C$172.7 million.

Strathcona still expects to use its enlarged position to vote against the tie-up between MEG Energy and Cenovus at the special meeting of shareholders on Oct. 9, saying that it has the backing of a number of shareholders in the company.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

September 15, 2025 07:36 ET (11:36 GMT)