Shareholders in MEG Energy Corp. have given approval to a $8.6-billion takeover bid by Cenovus Energy Inc. after several vote delays and bid enhancements. Over 86% of shares voted in favor of the deal, surpassing the required two-thirds majority. The special meeting, initially scheduled for October 9, was postponed twice due to bid adjustments and lack of shareholder support. Finally, the deal was approved on Thursday after a regulatory issue caused another delay.
The takeover saga began in April when Strathcona Resources Ltd. made a bid to acquire MEG, which was rejected by the MEG board. Subsequent bid revisions and negotiations led to Cenovus’s successful offer acceptance by MEG in August. Strathcona later withdrew its bid, clearing the path for Cenovus to increase its offer multiple times, eventually securing shareholder backing.
Cenovus and MEG have adjacent oilsands assets at Christina Lake, with potential synergies and cost efficiencies anticipated from the merger. The deal is expected to boost Cenovus’s daily oilsands production by 110,000 barrels, with plans to increase output to 850,000 boe/d by 2028. Additionally, a side-deal involving the sale of assets to Strathcona facilitated the final approval process, despite a minor delay caused by a shareholder complaint.
The acquisition marks a significant development in the Canadian oil and gas industry, reflecting evolving market dynamics and strategic maneuvers among key players in the sector.