Cenovus Secures Strathcona's Support for MEG Deal With Asset Sale, Sweetened Offer

By Adriano Marchese

Cenovus Energy said it will get former rival bidder Strathcona Resources' support to acquire MEG Energy in return for the sale of certain properties post-merger and a higher sale consideration.

Cenovus, which has entered into an agreement to acquire MEG, said Monday that it has entered into a voting support agreement with Strathcona under which Strathcona has agreed to vote its 14.2% stake in MEG energy in favor of the Cenovus-MEG tie up.

The vote was originally set for Oct. 22, but was pushed back to Oct. 30 after Cenouvs said it expected about 63% of MEG shares expected to be voted at the meeting are in favor of the approval of the transaction with Cenovus, not enough to reach the 66.7% needed for it to pass.

Cenovus said that it will sell to Strathcona certain assets following the merger that include the Vawn thermal heavy oil asset in Saskatchewan and certain undeveloped lands in western Saskatchewan and Alberta.

The price for the assets will be 150 million Canadian dollars ($107.2 million), half in cash and the other half in contingent considerations depending on future commodity prices.

At the same time, Cenovus will increase the total price it will pay to acquire MEG energy to C$30 per MEG share. This was up from a previous C$29.50 it had settled on previously.

Under the terms of the amended agreement, each MEG shareholder will now have the option to choose between the C$30 in cash or 1.255 Cenovus common shares, up to a limit of up to 159.6 million Cenovus shares and C$3.8 billion in cash.

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

(END) Dow Jones Newswires

October 27, 2025 06:50 ET (10:50 GMT)