Strathcona Resources makes stock-and-cash takeover offer for MEG Energy

The Canadian Press

· Posted: May 16, 2025 9:18 AM EDT | Last Updated: 2 minutes ago

Strathcona Resources Ltd. is making a takeover stock-and-cash connection for oilsands shaper MEG Energy Corp. that values the institution astatine astir $5.9 billion.

The connection comes aft Strathcona, which already owns astir a 9.2 per cent involvement successful MEG, says it sent a takeover connection to the MEG committee of directors successful April, but was rejected earlier this week.

"Strathcona respects the MEG board's close to disregard immoderate connection made for MEG, and it has nary crushed to judge that its determination to disregard Strathcona's connection was not made successful bully faith," the institution said successful a quality release.

"However, Strathcona believes the benefits of a operation of Strathcona and MEG are important capable that MEG Shareholders should person the accidental to determine for themselves."

MEG said Friday that its committee of directors volition see and measure the Strathcona connection erstwhile it has been received and urged shareholders to instrumentality nary enactment until it has made a recommendation.

Strathcona is offering 0.62 of a Strathcona stock and $4.10 successful currency per MEG stock successful the connection worthy $23.27 per MEG stock based connected the closing terms of its shares connected Thursday.

MEG shares closed astatine $21.30 connected the Toronto Stock Exchange connected Thursday.

Strathcona said it is acceptable to prosecute with the MEG committee and would besides enactment a strategical alternatives process to find if a superior transaction is available.

"Strathcona would beryllium consenting to enactment constructively and successful bully religion successful specified a process, including signing a communal confidentiality statement to stock non-public information, provided it is not required to motion a standstill agreement," the institution said.

Strathcona said a operation with MEG would make Canada's 5th largest lipid shaper and 4th largest steam-assisted gravity drainage producer, with among the largest proved lipid reserves successful North America.

It said it has identified $175 cardinal successful yearly synergy opportunities, including $50 cardinal successful overhead simplification costs, if the woody goes ahead.

On Wednesday, Strathcona announced a bid of 3 agreements to merchantability its assets successful the Montney portion valued astatine a full of $2.84 cardinal successful a determination that volition marque it a pure-play dense lipid company.

It besides said it has bought the Hardisty crude-by-rail obstruction terminal successful Alberta for astir $45 million.