Canadian oil and gas producer Strathcona said on Friday it supports MEG Energy’s decision to initiate a strategic alternatives process and explore potential deals after MEG urged shareholders to reject Strathcona’s C$6 billion ($4.38 billion) hostile takeover bid.
On Monday, MEG Energy advised shareholders to reject the offer, describing it as inadequate and not in their best interests.
The board also launched a strategic review to consider alternatives that could deliver greater value than MEG’s current plan to remain a standalone company.
Strathcona, which is backed by Calgary-based private equity firm Waterous Energy Fund, said it remains willing to participate in the alternatives process and looks forward to constructive engagement with MEG’s board
Strathcona said it believes it is the only peer company which would provide meaningful overhead synergies if a deal is reached.
Since 2020, Strathcona, has become one of the fastest-growing oil companies in North America through a series of acquisitions.
The all-cash-and-stock offer announced by Strathcona in May, would combine two of Canada’s largest pure-play thermal oil sands operators and make Strathcona the country’s fifth-largest oil producer.
(Reporting by Anusha Shah, additonal reporting by Gursimran Kaur in Bengaluru; Editing by Tasim Zahid)