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Strathcona Resources Increases Offer For MEG Energy To $30.86 A Share, Topping Cenovus

Strathcona Resources (TSX: SCR) has revised their offer to acquire MEG Energy (TSX: MEG), announcing this morning that they have increased their offer to top the arrangement presented by Cenovus Energy (TSX: CVE).

Under the revised offer, Strathcona is now offering 0.80 of a common share of Strathcona for each share of MEG Energy. The arrangement amounts to an offer of $30.86 per share based on Friday’s closing prices, and an 11% premium to the offer presented by Cenovus, which is currently valued at $27.79 a share.

The offer is also 10% higher than Strathcona’s prior offer.

In making their offer, Strathcona highlighted that the cash-heavy arrangement entered into between MEG Energy and Cenovus limits the upside for investors, claiming that only 4% of the future upside in the long-life assets of MEG is available to long term shareholders under that arrangement. At the same time, Strathcona pitched that over $205 million in annual synergies exist under their own offer for MEG, alongside 43% continued ownership for MEG shareholders.

As it currently stands, Strathcona holds a 14.2% interest in MEG after recent purchases, which they intend to vote against the current proposed transaction with Cenovus.

Strathcona Resources last traded at $38.50 on the TSX.


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

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