The board of Canadian oil sands company MEG Energy adjourned its expected shareholder vote Thursday on a buyout by Cenovus Energy, saying a regulatory inquiry has prompted the need to disclose additional information. The vote on the sale, which would have ended a months-long bidding saga for what is Canada’s last pure-play oil sands producer, will take place on November 6 instead, MEG’s board chair James McFarland said.
The adjournment is being made with Cenovus’ consent, he said, and will give MEG the opportunity to make disclosures around an asset transaction announced Monday between Cenovus and one-time rival bidder Strathcona Resources. Cenovus said Monday it had entered into a voting support agreement with Calgary-based Strathcona, which owns 14.2% of MEG and had previously indicated it would vote against Cenovus’ offer. In exchange, it said Strathcona would purchase from Cenovus its Vawn thermal oil project in Saskatchewan as well as certain undeveloped lands in Saskatchewan and Alberta for C$75 million ($53.5 million) in cash at closing, and additional contingent payments of up to C$75 million. Cenovus and Strathcona, which kicked off the battle for MEG in May by launching a hostile bid for the oil sands producer, had been locked for months in a bidding war. But Strathcona abandoned its pursuit after Cenovus raised its offer price earlier this month. Analysts had said the deal between the two former rivals would push Cenovus’ support for its offer to well above the approximately 66% of MEG shareholders it needed for its bid. But last week three MEG shareholders told Reuters they had filed complaints with Alberta’s securities regulator over what they view as the board’s attempt to tilt the sales process in Cenovus’s favour.
A spokesperson for the Alberta Securities Commission declined to comment.
(Reporting by Amanda Stephenson in Calgary; Editing by Rashmi Aich and Stephen Coates)