Strathcona supports Cenovus' C$30 per share offer for MEG

Cenovus Energy increased its offer for MEG Energy by C$30 per share on Monday, securing the support of Strathcona, MEG's biggest shareholder.

Cenovus raised its offer to C$29.80 for each share earlier this month. It said that it was "best and last" in order to compete with Strathcona for Canada's largest pure-play oil company.

Strathcona abandoned its bid for Cenovus after the revised offer. Strathcona had increased its stake in MEG to 14.2% and planned to vote against it.

MEG now expects that around 79% will approve the improved deal, after Strathcona decided on Monday to support the deal with their 36.1 million shares.

The board repeatedly encouraged shareholders to reject Strathcona’s bid by calling it “fundamentally inattractive” and reaffirmed their support for Cenovus’s offer.

MEG's Christina Lake project is a highly sought-after asset because of its low operating costs, long reserve life and potential to grow production.

The meeting of shareholders on the deal is now expected to take place on October 30. It was originally scheduled for October 22, but it has been postponed. Two-thirds approval is required by shareholders.

(source: Reuters)