Canadian oil sands producer MEG Energy on Monday urged shareholders to reject the sweetened takeover bid from Strathcona Resources, and reaffirmed support for sale to Cenovus Energy.
“The revised Strathcona offer remains fundamentally unattractive,” said James McFarland, chair of MEG’s board. “MEG shareholders would be exposed to inferior assets, an overvalued Strathcona share price, significant overhang risk and governance risk.”
The takeover saga began in May when Strathcona launched a C$5.93 billion ($4.29 billion) hostile bid for MEG Energy. Cenovus countered this with a cash-and-stock agreement in August.
Since then, Strathcona has raised its stake in MEG to 14.2%, aiming to vote against the deal, and earlier this month sweetened its original offer to C$30.86 per share, compared with Cenovus’ nearly C$28 bid.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Vijay Kishore)