Canada-based oil and gas producer Strathcona Resources has sweetened its takeover offer for oil sands producer MEG Energy.
The revised bid follows Strathcona's recent acquisition of approximately 6.66 million MEG shares for $190.8m.
New terms set by Strathcona offer 0.80 of a common share for each MEG share. This revised offer values MEG at C$30.86 per share.
Strathcona said that the revised offer represents an 11% premium over the current value of an agreement between MEG and Cenovus Energy, announced in August of this year.
It also represents a 10% increase from Strathcona's initial bid, valued at C$28.02 per MEG share.
The premium is based on the average share prices of Strathcona and Cenovus as of 5 September 2025.
Previously, Strathcona announced plans for a special distribution of C$2.14bn to its shareholders in the fourth quarter, either as a dividend or a return of capital.
If the takeover succeeds, this distribution will translate to roughly C$5.22 per Strathcona share. If the bid fails, the distribution would be around C$10 per share to current Strathcona shareholders.
Post-takeover and special distribution, Strathcona anticipates having 410 million shares outstanding and C$3bn in net debt.
Strathcona’s ownership would be split, with around 48% held by Waterous Energy Fund and Strathcona insiders, 9% by existing Strathcona shareholders and 43% by MEG shareholders.
MEG's special committee and board are set to review the revised Strathcona offer and will provide a response by 15 September 2025.
BMO Capital Markets and Burnet, Duckworth & Palmer are advising MEG, while RBC Capital Markets and Norton Rose Fulbright Canada are counselling the special committee.
