Monday, October 6, 2025

MEG Energy To Be Acquired By Cenovus At $7.9 Billion Valuation

MEG Energy (TSX: MEG) has officially become the focus of a bidding war. The company this morning indicated that it has entered into an agreement with Cenovus Energy (TSX: CVE) to be acquire in a deal valuing the company at $7.9 billion.

The arrangement agreement follows Strathcona Resources (TSX: SCR) earlier this year making a hostile $5.9 billion bid for MEG, which MEG’s board of directors suggested investors reject. Following that offer, rumours swirled that Cenovus was attempting to work with Indigenous partners to assemble their own bid for the oilco.

Under the terms of the arrangement with Cenovus, MEG Energy is to be bought out for $27.25 per share, which represents a substantial increase over the $23.27 per share offer Strathcona previously made. Shareholders of MEG will have the option to elect to receive $27.25 in cash for each share held, or 1.325 shares of Cenovus, with that offer subject to pro-ration. On a fully pro-rated basis, the offer amounts to $20.44 in cash and 0.33125 of a Cenovus common share.

The price reflects a 33% premium to MEG’s 20-day volume weighted average price on May 15, which was the last trading day before Strathcona launched their hostile process. Strathcona’s offer meanwhile represented a premium of just 9.3%.

The transaction is said to be fully financed by Cenovus, and is not subject to any financing conditions.

“After considering the Strathcona unsolicited offer, engaging with multiple parties on proposals, and assessing them against MEG’s standalone plan, the Special Committee and the MEG Board unanimously concluded that the proposed transaction with Cenovus represents the best strategic alternative, with short- and long-term value creation potential through a premium purchase price, an amalgamation of adjacent top tier oil sands assets, and participation in significant associated synergies,” commented James McFarland, Chairman of MEG Energy, on the transaction.

Operationally, Cenovus is expecting to realize $150 million in near-term annual synergies from the transaction, which are claimed to grow to $400 million per year by 2028. The deal meanwhile will see the expansion project at Christina Lake continue to advance, pushing capacity to 135,000 bpd.

The transaction is expected to close in the fourth quarter of 2025.

MEG Energy last traded at $27.56 on the TSX.


Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Fortune Bay: The Potential Billion Dollar Project

Japan Gold Enters New Chapter as Barrick Alliance Concludes – John Proust

Barrick Mining’s “Company Defining [Gold] Discovery”

Recommended

ESGold Secures $9 Million In Non-Dilutive Funding From Ocean Partners

Altamira Gold Encounters Porphyritic Intrusive Rocks In Initial Scout Drilling At Regional Targets

Related News

Strathcona’s Q3 2024 Earnings Slip Despite 21% Production Boost as Prices Falter

Strathcona Resources (TSX: SCR) has released its third-quarter 2024 results, showing a mixed performance driven...

Thursday, November 14, 2024, 09:23:48 AM

Cenovus Energy Cuts Workforce Before Q1 Report

Cenovus Energy (TSX: CVE) has confirmed job reductions this week as it faces mounting pressure...

Wednesday, May 7, 2025, 02:07:00 PM

MEG Energy: Cenovus Comes In With $7.9 BILLION Offer

It’s been a while folks, but it seems that we finally have another bidding war...

Sunday, September 7, 2025, 01:23:00 PM

Cenovus Energy Ends 2021 With $46.36 Billion In Revenue

Cenovus Energy (TSX: CVE) reported today its Q4 and full-year 2021 financial results. The report highlighted...

Tuesday, February 8, 2022, 03:49:00 PM

Cenovus Energy Completes Acquisition Of Husky Energy

The previously announced $23.6 billion all stock transaction between Cenovus Energy (TSX: CVE) and Husky...

Monday, January 4, 2021, 09:00:34 AM