Cenovus Christina Lake, Web Image
CALGARY – Strathcona Resources Ltd. has ended its bid to take over MEG Energy Corp., saying a revised deal between MEG and Cenovus Energy Inc. makes its own offer impossible to complete.
The Calgary-based company said the MEG board’s decision to waive Cenovus’s standstill agreement and allow it to vote newly acquired shares in favour of its own transaction was “without precedent” in Canadian public markets. Strathcona said those conditions, combined with the board’s ability to extend the Cenovus meeting date and allow continued share purchases, made a competing or improved offer “impractical and not in the best interests of Strathcona shareholders.”
While disappointed with the outcome, Strathcona said the process ultimately led to what it called a “more equitable transaction” between MEG and Cenovus, giving MEG shareholders a better chance to benefit from future gains. The company said it has formally terminated its offer effective immediately, and all MEG shares tendered will be returned to their holders.
Strathcona also announced plans for a $10-per-share special distribution to its own shareholders, funded by proceeds from the sale of its Montney natural gas assets. The payout would form part of a broader reorganization into a pure-play heavy oil company. Shareholders will be asked to approve the plan at a special meeting on November 27, with majority owner Waterous Energy Fund already committed to voting in favour.
If approved by shareholders and the Alberta Court of King’s Bench, the distribution is expected in December. The company said it will provide full details in a management information circular to be filed on SEDAR+ in early November.
Strathcona said it remains focused on long-term growth, with plans to expand production from 120,000 to 195,000 barrels per day by 2031, backed by a $1-billion capital budget for 2026. It expects to remain one of North America’s largest pure-play heavy oil producers, with most of its growth driven by steam-assisted gravity drainage projects in Alberta and Saskatchewan.
Comments