MEG Energy Shares Rise on Higher Offer, Merger Backing by Strathcona

By Adriano Marchese

Shares in MEG Energy were higher Monday morning after Cenovus Energy increased its offer for to buy the company and received support from former rival bidder Strathcona Resources.

MEG Energy shares traded 4.3% higher in Toronto at 30.11 Canadian dollars ($21.51).

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.

At the same time, the deal also increased the likelihood of getting the necessary votes of a two-thirds majority after Cenovus 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.

This was originally a point of contention which could have blocked the deal from going through. The vote was originally set for Oct. 22, but was pushed back to Oct. 30 after Cenovus said that 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.

To win over Strathcona's support, Cenovus agreed to 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 C$150 million--half in cash and the other half in contingent considerations depending on future commodity prices.

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

(END) Dow Jones Newswires

October 27, 2025 10:06 ET (14:06 GMT)