Canadian oil and gas producer Strathcona Resources said on Thursday it intends to buy an additional 5% stake in rival MEG Energy and vote against the acquisition of MEG by another rival, Cenovus Energy.
Cenovus agreed in August to acquire MEG in a C$7.9 billion ($5.72 billion) cash-and-stock deal after MEG’s board rejected Strathcona’s lower C$6 billion takeover bid in June.
MEG has set October 9 for a shareholder vote on its proposed deal, which its board has approved but needs support from at least two-thirds of investors to go through. The deal is expected to close early in the fourth quarter of 2025.
The deal would create one of the largest oil sands companies in Canada, combining MEG’s Christina Lake oil sands operations in northern Alberta with Cenovus’ neighboring assets, for combined oil sands production of over 720,000 barrels per day.
Strathcona, which currently holds about 9.2% of MEG, said it will increase its ownership to about 14.2%, strengthening its position as a significant minority shareholder in the company.
Strathcona’s executive chair, Adam Waterous, has told Reuters that the company will continue engaging with MEG shareholders before the September 15 tender deadline for its offer.
MEG and Cenovus did not immediately respond to Reuters’ requests for comment outside regular business hours.
(Reporting by Disha Mishra in Bengaluru; Additional reporting by Mrinmay Dey; Editing by Harikrishnan Nair and Mrigank Dhaniwala)