Cenovus makes case to MEG Energy shareholders over revised Strathcona bid

[Oilsands Refinery]
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Cenovus Energy (NYSE:CVE [https://seekingalpha.com/symbol/CVE]) CEO Jon McKenzie defended his company Friday against criticisms of its offer for rival oil sands producer MEG Energy (OTCPK:MEGEF [https://seekingalpha.com/symbol/MEGEF]), telling Reuters its bid is "fair and final [https://www.reuters.com/business/energy/cenovus-ceo-defends-meg-energy-bid-which-is-fair-final-2025-09-19/]" and that there is no precedent in Canada to indicate MEG should be worth more than its bid.

"There hasn't been a transaction that's been done on a pure bitumen play for a value in excess of what we're offering," the CEO said.

McKenzie made the comments a day after Cenovus (NYSE:CVE [https://seekingalpha.com/symbol/CVE]) issued a slide presentation [https://www.cenovus.com/disclaimerir] touting its arguments for MEG (OTCPK:MEGEF [https://seekingalpha.com/symbol/MEGEF]) shareholders to accept its cash-and-stock offer.

MEG's (OTCPK:MEGEF [https://seekingalpha.com/symbol/MEGEF]) board has endorsed Cenovus' (NYSE:CVE [https://seekingalpha.com/symbol/CVE]) deal, which is up for a vote by shareholders on October 9, but MEG also has received a hostile bid from Strathcona Resources (OTCPK:STHRF [https://seekingalpha.com/symbol/STHRF]), which recently revised its offer [https://seekingalpha.com/news/4493046-strathcona-raises-offer-for-meg-energy-seeking-to-outbid-cenovus] to 0.8 of a share for each MEG share it does not already own compared to Its initial overture that was a combination of cash and stock; when the new bid was announced, it was worth C$30.86/share, up from C$28.02 previously.

Cenovus (CVE [https://seekingalpha.com/symbol/CVE]) argues [https://seekingalpha.com/pr/20238054-cenovus-releases-presentation-on-meg-transaction-highlighting-superior-value-for-shareholders] the Strathcona (OTCPK:STHRF [https://seekingalpha.com/symbol/STHRF]) offer carries significant downside risk if that company's shares decline once the deal is complete, saying Strathcona shares are "illiquid and overvalued relative to peers."

Strathcona (OTCPK:STHRF [https://seekingalpha.com/symbol/STHRF]) is backed by Waterous Energy Fund, which has built its position in MEG (OTCPK:MEGEF [https://seekingalpha.com/symbol/MEGEF]) to 14.2% of shares; CEO Adam Waterous has said the private equity fund will vote against the Cenovus (CVE [https://seekingalpha.com/symbol/CVE]) transaction at the MEG shareholder meeting, where two-thirds support is required.

MORE ON CENOVUS ENERGY AND MEG ENERGY

* Cenovus Energy: A Great Canadian O&G Company To Buy [https://seekingalpha.com/article/4824309-cenovus-energy-a-great-canadian-o-and-g-company-to-buy]
* MEG Energy: Another Unwanted Strathcona Offer [https://seekingalpha.com/article/4821091-meg-energy-another-unwanted-strathcona-offer]
* Cenovus And MEG Energy: Great Deal [https://seekingalpha.com/article/4816181-cenovus-and-meg-energy-great-deal]