Strathcona withdraws from MEG Energy race after Cenovus sweetened its bid
Strathcona Resources abandoned Friday its bid to acquire MEG Energy. This ended its months-long struggle with Cenovus Energy over ownership of Canada's largest pure-play oil-sands company.
Strathcona is the majority shareholder in MEG. Cenovus raised its offer to C$8.6 Billion ($6.17 Billion) including debt earlier this week.
Cenovus referred to its revised C$29.80 bid per share as its "best-and-final" offer. Strathcona revised its offer to MEG last month, valuing it at C$30.86 a share.
Strathcona stated on Friday that the revised deal reached between MEG, Cenovus and MEG as well as certain actions taken by MEG make "an improved MEG offer impractical and is not in the best interest of Strathcona's shareholders."
The takeover drama began in May, when Strathcona made a hostile bid of C$5,93 billion ($4,29 billion) for MEG. Cenovus responded with a C$7.9-billion cash-and stock offer. Strathcona's stake in MEG has since been raised to 14.2%.
MEG's Board had repeatedly encouraged shareholders to reject Strathcona’s bid. It called 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 oil sands of Canada are one of the few areas of large-scale growth that has been dominated by domestic companies after the majority of foreign firms left over the last decade.
(source: Reuters)