Cenovus Energy is in talks with Indigenous groups in Canada to jointly buy MEG Energy, Bloomberg News reported on Tuesday, citing people familiar with the discussions.
A group of First Nations and Metis communities including Chipewyan Prairie First Nation and Heart Lake First Nation are in talks with Cenovus about taking a C$2 billion ($1.45 billion) stake in MEG, the report said.
The Indigenous’ stake would be backed by financial support from the federal and provincial governments, while Cenovus would bid for the rest, Bloomberg said.
Shares of MEG Energy were up over 2% in afternoon trade.
Cenovus’ name has been floated by analysts and in media reports as a possible white-knight buyer for rival oil sands producer MEG Energy, which is the subject of a hostile takeover attempt by Strathcona Resources.
In June, MEG Energy advised its shareholders to reject Strathcona’s C$6 billion hostile takeover bid and said it would initiate a strategic alternatives process and explore potential deals.
MEG and Cenovus did not immediately respond to Reuters requests for comment.
The First Nations groups involved also did not respond to a request for comment.
(Reporting by Sumit Saha in Bengaluru; Editing by Alan Barona)