Strathcona Raises MEG Bid to Block Deal Made With Cenovus
(Bloomberg) – Strathcona Resources Ltd., Petroleum Sands Manufacturer Meg Energy Corp.’a increased the offer to the manufacturer of the oil sand manufacturer’s larger Canadian rival Cenovus Energy Inc.
Strathcona, controlled by former investment banker Adam Waterous, currently offers 0.8 shares for each share of Meg and values the Calgary -based target with an existing prices of $ 7.8 billion ($ 5.7 billion). The new price is about 10% higher than Strathcona’s original acquisition offer, and last month, Genovus decided to pay for Meg. The new proposal expiration date is determined on October 20, 11 days after the shareholders are planned to vote for the Genovus offer.
Brookfield infrastructure partners LP’s four years ago Pembina Pipeline Corp.
Strathcona’s first proposal for Meg was criticized by some shareholders very low, and Genovus took over the company, and was not well received by some investors because it valued the company less than the closing price of the previous day.
Waterous, the meg shareholders of the proposal allowed the top of the combination, while Cenovus’ mostly cash agreement will force them to “leave the train”, he said.
“I haven’t talked to a single meg shareholder who was satisfied with the Genovus Meg’s Board of Directors,” Waterous said in an interview on Monday.
Meg, the board of directors and a special committee established Strathcona’nın evaluating the latest offer and will respond before September 15, he said.
Genovus did not respond immediately to an e -mail looking for a comment on the new Strathcona offer.
Genovus does not predict that he will increase his proposal that he believes to be full and fair, according to a person who has knowledge of the situation that refuses to be defined because he does not have the authority to comment.
Strathcona had purchased a 9.2% share in Meg when he first introduced his offer, and as of last week, he increased the share to 14.2%. Waterous promised to vote against the Genovus agreement, which required more than 66% of the votes. If it was successful, Meg’s inheritance would be the biggest purchase for Strathcona, which has been built with agreements every last decade.
Meg has repeatedly closed Waterous’ developments, first he was not interested in a sales when the company approached the board of directors, and then called on the proposal to reject the offer after taking the shareholders directly to investors. The Board argued that the proposal was very low and will expose its investors to “sub -assets ..
Meg later launched a review of alternatives and accepted Cenovus’s taking over last month. Cenovus offers Meg value more than $ 7 billion C, compared to Friday’s closing stock price-but three-quarters also three cash. Strathcona’s offer is all stock.
Strathcona’s latest proposal will provide shareholders a special dividend of $ 5.22 c per share in the fourth quarter, which will make the offer a “most attractive offer on the table”. The company has a share in all three companies.
“The ball is in Genovus’ court to see if the ball, synergies and other financial benefits are mathematics in a higher bid, S said SMEAD.
Genovus and Meg ultimately see the ability to reduce more than $ 400 million C, because there are close operations in Northeast Alberta, where Meg pumps about 100,000 barrels per day. Waterous, Strathcona can capture most of the synergies defined by Cenovus, except to develop adjacent wells along the rental line of the property.
Meg’s shares increased by 2.4% and has increased to $ 29.02 c in Toronto for more than a year, but Strathcona’s current bid at the current stock prices is below the value per share. For the last two weeks, Meg was traded above the cash price of Genovus’ proposal. Strathcona shares fell to $ 38.31 with a decrease of 0.3%, while Cenovus changed little at 22.12 c $.
-Help from Decloet.
(Updates with Genovus View presented in the ninth paragraph)
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