Cenovus Energy has upped their offer as they look to acquire MEG Energy, delaying the vote to later in October.
Read more: Cenovus Energy to acquire MEG Energy
On Oct. 8, MEG Energy announced it was entering into an amended agreement with Cenovus. The new agreement increases the consideration payable to MEG shareholders to $29.80 per share. This new agreement values MEG at $8.6 billion, an increase from the original offer of $7.9 billion.
Each shareholder will also have the option to receive $29.50 in cash or 1.240 Cenovus common shares per MEG share.
“We received support from the majority of MEG’s shareholders for our transaction. However, many MEG shareholders indicated they would prefer to receive greater Cenovus share consideration they can more fully participate in the upside of the combined company,” said Jon McKenzie, Cenovus president and chief executive officer.
“We listened to these comments and have changed the consideration under our offer to a maximum of 50 per cent cash and 50 per cent Cenovus shares, while increasing the aggregate purchase price.”
Cenovus also amended the terms of the existing standstill agreement to allow them to complete purchases of up to 9.9 per cent of MEG’s outstanding common shares.
Cenovus says this new agreement represents their best and final offer for MEG as a battle to take over continues to brew between Cenovus and Strathcona Resources Ltd.
Strathcona first made a offer to acquire MEG Energy in late May, which MEG urged its shareholders to take no action on, recommending they reject the offer.
Strathcona revised their offer, which they say equates to $30.86 per MEG share, in early September. They also have 14.2 per cent interest in MEG, which they intend to use to vote against the MEG deal with Cenovus.
MEG shareholders were set to vote on the Cenovus offer earlier this week. That meeting has now been postponed until Oct. 22.
For the Cenovus deal to go through, 66 2/3 per cent is required for approval.
Read more: MEG Energy rejects newest Strathcona offer
