Strathcona Resources Withdraws MEG Energy Bid As Cenovus Energy Secures Friendly Deal

(RTTNews) - Strathcona Resources Ltd. has ended its hostile takeover attempt of MEG Energy Corp. (MEG.TO), paving the way for a friendly acquisition by Cenovus Energy Inc. (CVE, CVE.TO). The decision follows Cenovus's revised offer for MEG, which was announced two days earlier and deemed more favorable by MEG's board of directors. Strathcona stated that, due to the amended arrangement between MEG and Cenovus, the conditions required to satisfy its own offer—or any improved version of it—can no longer be met.

As previously disclosed, Strathcona intends to distribute a special payment of C$10.00 per share to all holders of its common stock. Shareholders of record as of October 17, 2025, will be asked to approve the Plan of Arrangement at a special meeting scheduled for November 27, 2025. Approval will require at least two-thirds of the votes cast.

On October 8, 2025, MEG Energy announced it had entered into an amending agreement with Cenovus dated October 7, modifying their original arrangement from August 21. The revised deal—referred to as the Improved Cenovus Transaction—increases the consideration for MEG shareholders to C$29.79 per share, based on Cenovus's closing price on October 10, and raises the proportion of share-based compensation.

Under the terms of the amended agreement, MEG shareholders may choose to receive either C$29.50 in cash or 1.240 Cenovus common shares per MEG share. However, the transaction is subject to pro-ration, with a cap of C$3.8 billion in cash and 157.7 million Cenovus shares. On a fully pro-rated basis, shareholders would receive approximately C$14.75 in cash and 0.620 Cenovus shares per MEG share.

To accommodate the revised offer, MEG has postponed its shareholder meeting to October 22, 2025, allowing additional time for proxy submissions and voting. The transaction is expected to close on or around October 27, 2025, pending satisfaction or waiver of closing conditions.