Cenovus Energy must sweeten its bid for MEG Energy, says shareholder who sees ‘big move’ as unlikely
Genovus Energy (Cve.To) (CVE) may be reluctant to sweeten the purchase agreement, a smallest Canada Oilsands producer Meg Energy, a smaller Canadian Oilsands producer after a magnified proposal from Strathcona Resources (SCR.TO) on Monday. This is according to an institutional investor who owns all three stocks in the developing acquisition drama.
Strathcona’s latest proposal values $ 30.86 above Cenovus’s cash and stock agreement, which was presented in August. The new agreement ends on October 20. Strathcona previously offered $ 28.02 per share.
Meg said on Monday that the board of directors and a private committee would evaluate Strathcona’s new offer and respond to 15 September or before 15 September. In the meantime, the shareholders are expected to vote for Cenovus at the 9th of October shareholder meeting, where two -thirds of approval is required.
SMEAD Capital Management’s portfolio manager and CEO Cole Smead says that there is an offer of over $ 30 per share expected by Meg shareholders.
“We don’t see Genovus chasing it over 30 dollars [per share]it will require a larger stock component and will be seen as more diligent. ” Yahoo Finance Canada.
“Currently, the risk for Genovus is going to a power of attorney and losing votes. “This is a big move.”
Meg, Suncor Energy, Canada Natural Resources, Empire Petroleum and Genovus, such as giants such as Canada is seen as the last opportunity for large -scale expansion in oil channels. A combination with Strathcona will create a new producer with more than 720,000 barrels per day.
Strathcona has or controls Meg’s 14.2 percent stake.
SMEAD estimates that 20 to 30 percent of Meg shares are kept by “Arbitquers” who want to take advantage of a purchase agreement.
“If [Cenovus] He goes to this vote without meeting the conditions and there is a risk of losing the vote clearly. ”
Yahoo Finance Canada He reached Genovus for a comment.
MEG shares listed with Toronto closed 0.34 percent higher on Tuesday.
Michael Spyker, the main analyst of Petroleum and Gas Consultancy company HTM Energy Partners, said that the public offer war for Meg has overshadowed the company’s value as an independent oil operator.
“For meg shareholders, any transaction should be compared with the independent value (unfortunately a narrative that disappears).” Long shipment on Monday on the social media platform X.
Spyker is the place where an agreement between $ 30 and $ 31 per share is compelling.
