An oil pumpjack located in the province of Alberta

Husky Energy has ended the C$6.4bn ($4.95bn) acquisition bid for Canadian oil sands producer MEG Energy after failing to secure enough support from shareholders for the deal.

Based on a condition that at least 66.7% of MEG shares must be tendered for the completion of the acquisition, the company’s hostile offer expired on 16 January.

Husky decided not to extend the offer citing lack of MEG Board and shareholder support, as well as lamented that market conditions changed dramatically since the offer was proposed.

The company was referring to the imposition of government-mandated production cuts and lack of ‘meaningful’ progress on Canadian oil export pipeline developments.

“We are investing in reliable, higher margin production growth that continues to lower the oil price we need to break even.”

Husky Energy CEO Rob Peabody said: “Given the outcome of the tender process, Husky will continue to focus on capital discipline and the delivery of the five-year plan we set out at our Investor Day in May 2018.

“We are investing in reliable, higher margin production growth that continues to lower the oil price we need to break even. Both our integrated corridor and high-netback offshore businesses receive global pricing and provide insulation from ongoing commodity price volatility.”

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Pursuant to the terms of the unsolicited offer made last September, MEG shareholders were given the option to choose either C$11 in cash a share or 0.485 of a Husky share to tender their shares.

In October, MEG board rejected the acquisition bid saying the offer undervalued the company.

Husky will now focus on developing its deep portfolio of organic growth projects.

The company recently announced plans to explore the potential sale of its Canadian non-core downstream assets including its retail business and Prince George Refinery.