Bloomberg News CEO: Cenovus is 'closing doors' on a higher bid for MEG Energy
Cenovus Energy, Canada, does not intend to increase its bid for MEG Energy, an oil sands producer, despite Strathcona Resources' higher offer, according to its CEO Jon McKenzie, who spoke with Bloomberg News on Tuesday.
MEG shares fell by 2%, to C$28.54. Cenovus shares rose more than 3 % to C$23.28.
The takeover drama began in May, when Strathcona made a hostile bid of C$5,93 billion for MEG Energy. Cenovus responded with a cash and stock agreement in August.
Strathcona increased its stake in MEG from 14.2% to 14.2% since then. It aims to vote against this deal. On Monday, it sweetened its initial offer.
Strathcona revised its offer to value MEG at C$30.86 a share, as opposed to Cenovus' bid of C$28.
Companies are competing for MEG’s Christina Lake Oil Sands Project, due to its long life of reserves, low operating costs and high production potential.
The Canadian oil patch has a few remaining large-scale opportunities for expansion.
Cenovus MEG, and Strathcona have not responded to comments made immediately. (Reporting and editing by Krishna Chandra Eluri, Sriraj Kalluvila and Sumit Saha from Bengaluru)
(source: Reuters)
