Strathcona Drops Out of Bidding War for MEG Energy

Researched by Industrial Info Resources (Sugar Land, Texas)--MEG Energy (Calgary, Alberta) shareholders will vote on Cenovus Energy's sweetened offer for the pure-play oil sands producer on October 22 after rival Strathcona Resources Limited dropped its takeover bid.

The termination of Calgary-based Strathcona's offer ended a battle that began earlier this year, when MEG's board of directors rejected Strathcona's initial offer as inadequate.

On August 22, MEG announced it had entered an agreement for Cenovus (Calgary) to acquire all MEG's shares in a transaction that valued MEG at C$28.18 (US$20.43) per share, representing an enterprise value of approximately C$8.2 billion (US$5.94 billion), including assumed debt. For more information, see August 25, 2025, article - Cenovus Snatches Up MEG Energy to Create New Oil Sands Titan.

Strathcona then countered with a sweetened offer of C$30.86 (US$22.87) per share, but MEG's board of directors recommended that its shareholders reject that bid and stick with Cenovus' bid. For related information, see September 16, 2025, article - MEG Energy to Shareholders: Reject Latest Strathcona Offer, Accept Cenovus.

Last week, Cenovus fortified its offer to C$29.80 (US$21.23) per share, worth C$8.6 billion (US$6.13 billion), including assumed debt. The amended agreement also allowed Cenovus to buy about 10% of MEG's shares.

Strathcona terminated its takeover bid on Friday.

"On the back of a failed shareholder vote, the MEG board's decision to waive Cenovus' standstill and allow it to vote shares acquired after the record date in favor of its own transaction is without precedent in the Canadian public markets and the latest in a series of anti-competitive actions taken by the MEG board," Strathcona said in a press release.

Strathcona added that the MEG board's "ability to continuously extend the Cenovus meeting date, and continuously allow Cenovus to purchase and vote additional shares, makes an improved offer for MEG impractical and not in the best interests of Strathcona shareholders."

Cenovus' offer for MEG would create a combined company with more than 720,000 barrels per day (BBL/d) of output. Industrial Info is tracking more than US$9 billion worth of proposed projects from MEG, and more than US$18 billion worth from Cenovus. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a list of detailed MEG projects and click here for a list of Cenovus projects.

For its part, Strathcona said it remained committed to long-range organic growth from 120,000 BBL/d to 195,000 BBL/d by 2031. The company said its board of directors has approved a 2026 capital budget of C$1 billion (US$710,000). Industrial is tracking more than US$2.9 billion worth of projects from Strathcona. Subscribers can click here for a list.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).