The MEG Energy Corp. logo is seen in this undated handout photo. THE CANADIAN PRESS/HO, MEG Energy *MANDATORY CREDIT*
Cenovus Energy Inc. says its cash-and-stock bid for MEG Energy Corp. offers a premium valuation and certainty over a rival all-stock offer by Strathcona Resources Ltd.
“Cenovus brings scale, industry-leading experience, tier-1 assets, near-term growth, diversified revenues, a stronger balance sheet and clearly defined synergies,” Cenovus said in a presentation laying out its arguments for MEG shareholders to accept the friendly deal.
Last week, Strathcona revised its hostile offer to 0.80 of a share for each MEG share it does not already own. Its initial overture this spring was a combination of cash and stock. When the new bid was announced, it was worth $30.86 per share, up from $28.02.
The Cenovus offer comprises 72 per cent cash and 28 per cent stock. Cenovus said its bid has an implied value of $28.44 and would represent a 39 per cent premium to where MEG’s stock was trading in mid-May. It said the price would represent the highest value ever paid for a pure-play steam-driven oilsands asset.
Cenovus argues the Strathcona deal carries significant downside risk if that company’s shares drop once the deal is complete, calling Strathcona’s current share price “overvalued.”
The MEG board has unanimously recommended shareholders back the Cenovus deal over the Strathcona proposal, which it has said is “fundamentally unattractive.”
Strathcona has called the Cenovus deal “lopsided” and the MEG board’s sale process “broken” for accepting it without meaningfully entertaining the competing Strathcona bid.
Strathcona executive chairman Adam Waterous has noted that Cenovus‘ stock jumped 10 per cent in the days following news of its deal with MEG last month, but typically an acquirer’s share price would fall after such an announcement.
He said that equates to a $3.9-billion gain in Cenovus‘ stock market value that MEG shareholders are mostly not able to enjoy, as they would only own four per cent of a post-takeover company.
Under the Strathcona deal, MEG shareholders would own 43 per cent of the new entity.
The Cenovus offer must be approved by a two-thirds majority vote by MEG shareholders expected to be held on Oct. 9. Strathcona has said it intends to vote its 14.2 per cent interest in MEG against the deal.
Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta., while Strathcona also has operations in the region.
This report by The Canadian Press was first published Sept. 19, 2025.
Companies in this story: (TSX:MEG, TSX:CVE, TSX:SCR)
The Canadian Press
- 0102 Lori Carr Coal Extended0102 Lori Carr Coal Extended
- 0093 Estevan OTS 20250093 Estevan OTS 2025
- 0101 VP Energy Road to adventure0101 VP Energy Road to adventure
- 0100 Turnbull Project Manager0100 Turnbull Project Manager
- 0099 Mryglod Steel 1080p0099 Mryglod Steel 1080p
- 0097 Eagle Sky Ventures LTD0097 Eagle Sky Ventures LTD
- 0095 Fast Trucking nearly 70 years good at it0095 Fast Trucking nearly 70 years good at it
- 0053 Kingston Midstream Westspur Alameda Click Before You Dig0053 Kingston Midstream Westspur Alameda Click Before You Dig
- 0092 Turnbull projects big and small0092 Turnbull projects big and small
- 0046 City of Estevan This is Estevan Teaser0046 City of Estevan This is Estevan Teaser
- 0087 Lori Carr Coal Expansion0087 Lori Carr Coal Expansion
- 0077 Caprice Resources Stand Up For Free Speech0077 Caprice Resources Stand Up For Free Speech
- 0076 Latus only0076 Latus only
- 0061 SIMSA 2024 For Sask Buy Sask0061 SIMSA 2024 For Sask Buy Sask
- 0051 JML Hiring Pumpjack assembly0051 JML Hiring Pumpjack assembly
- 0049 Scotsburn Dental soft guitar0049 Scotsburn Dental soft guitar
- 0041 DEEP Since 2018 now we are going to build0041 DEEP Since 2018 now we are going to build
- 0032 IWS Summer hiring rock trailer music
- 0022 Grimes winter hiring
- 0021 OSY Rentals S8 Promo
- 0018 IWS Hiring Royal Summer
- 0013 Panther Drilling PO ad 03 top drive rigs
- 0002 gilliss casing services0002 gilliss casing services
- 9002 Pipeline Online 30 sec EBEX9002 Pipeline Online 30 sec EBEX
- 9001