Strathcona Resources has announced plans to acquire an additional 5% stake in MEG Energy and intends to oppose the latter’s proposed acquisition by Cenovus Energy.
This strategic move comes as Cenovus aims to execute a C$7.9bn ($5.74bn) cash-and-stock deal to acquire MEG, following the rejection of Strathcona’s earlier C$6bn ($4.36bn) offer.
All the three firms are Canadian oil and gas producers.
Strathcona currently holds 23.4 million shares in MEG, representing about 9.2% of the latter.
The additional purchase would increase Strathcona’s holdings to approximately 14.2%. The company plans to make these purchases in compliance with applicable securities laws, subject to market conditions.
Cenovus’s acquisition of MEG is intended to bolster its standing as a leading steam-assisted gravity drainage (SAGD) oil sands producer. The merger would combine the assets of both companies, potentially raising production capacity to over 720,000 barrels per day.
MEG, based in Canada’s Alberta region, specialises in in situ thermal oil production and markets its products across North America and internationally. The acquisition must be approved by at least two-thirds of MEG shareholders at a meeting scheduled for 9 October 2025.
The deal is anticipated to conclude in Q4 2025.
Strathcona said that it has been consulting with other MEG shareholders over the past week and plans to vote against the Cenovus deal. The company plans to vote its shares against the resolution.
Any shares acquired by Strathcona will be purchased as soon as practicable, adhering to Canadian securities regulations. The purchase price may differ from the value proposed in Strathcona’s offer to buy all remaining MEG shares at 0.62 of a Strathcona common share and C$4.1 ($2.98) in cash per share.
Strathcona will need to release a statement detailing any share purchases as required by Canadian and US securities laws. This disclosure will include information on the number of shares bought and other relevant data after each transaction day concludes.
