Strathcona to raise MEG Stake in a daring power play that throws fresh turbulence into Cenovus Energy’s planned CA$7.9 billion ($5.7 billion) takeover of MEG Energy. The Calgary-based heavyweight announced Thursday it will boost its ownership in MEG by 5%, aiming to tip the scales in a battle for control over one of Canada’s prized oil sands producers.
The Numbers Behind the Move
Strathcona currently holds 23.4 million MEG shares, about 9.2% of the company. With the additional purchase, its stake would climb to 14.2%, positioning it as a key spoiler ahead of MEG’s crucial Oct. 9 shareholder vote.
That vote requires 66.67% approval from shareholders, either in person or by proxy, to greenlight Cenovus’ deal. Strathcona has already declared it will wield its shares against the acquisition.
A Clash of Oil Titans
Strathcona, a pure-play heavy oil producer specializing in thermal oil and enhanced recovery, has been locked in a fierce contest with Cenovus over MEG’s future. MEG, for its part, operates exclusively in the northern Alberta oil sands, giving it immense strategic importance.
Cenovus’ proposal offers MEG shareholders CA$27.25 per share—a package of 75% cash and 25% stock, with prorated payouts of CA$20.44 in cash plus 0.33125 Cenovus shares for every MEG share. The bid is designed to cement Cenovus’ dominance in the Christina Lake region, one of Alberta’s energy crown jewels.
