Shareholders back $8.6 billion Cenovus deal after months of rival bids, delays, and last-minute twists
A dramatic five-month takeover battle for one of Canada’s last pure-play oil sands producers has ended, as MEG Energy shareholders overwhelmingly approved an $8.6bn acquisition by Cenovus Energy, according to results released after a special meeting where more than 86 percent of votes cast supported the deal.
The acquisition, which adds 110,000 barrels per day of oil sands production to Cenovus’s portfolio and positions the company as Canada’s second-largest oil and gas producer, followed a series of bid revisions, regulatory delays, and shifting alliances, as reported by Bloomberg.
The deal is expected to close this month, pending final court approval and customary conditions.
The saga began in April when Strathcona Resources made an unsolicited cash-and-stock offer for MEG, only to be rebuffed and later accused by MEG’s board of making an “opportunistic” bid.
Strathcona subsequently increased its stake in MEG to over 14 percent and amended its offer to an all-stock proposal, but ultimately withdrew after Cenovus sweetened its own bid and secured Strathcona’s support, as reported by BNN Bloomberg.
The final hurdle came when a side-deal between Cenovus and Strathcona—valued at up to $150m for heavy oil assets in Saskatchewan—prompted a regulatory complaint from a former MEG employee, leading to a last-minute delay in the shareholder vote.
MEG later announced that all parties had resolved their differences amicably and no further opposition was expected, as per the company’s press release.
Cenovus and MEG operate adjacent oil sands properties at Christina Lake, and both companies have highlighted the potential for cost-savings and operational efficiencies from the merger.
With this transaction, Cenovus aims to increase its output to 850,000 barrels of oil equivalent per day by 2028, further consolidating its position in a sector now dominated by a handful of major players, according to Bloomberg.
