Cenovus Energy Inc. raised its takeover offer for MEG Energy Corp. on Wednesday in a proposal that values the company at about $8.6 billion, including assumed debt, up from its earlier offer valued at $7.9 billion.
The Cenovus offer faces a rival all-stock bid for MEG by Strathcona Resources Ltd., which already holds a 14.2 per cent interest in the company.
Under the new proposal, MEG shareholders will have the option to receive $29.50 in cash or 1.240 Cenovus common shares for each MEG share they hold, subject to limits on both.
Cenovus has also increased the total number of Cenovus shares available under the offer to 157.7 million, while the amount of cash available has been reduced.
On a fully pro-rated basis, the offer represents about $14.75 in cash and 0.620 of a Cenovus common share for a total value of about $29.80 per MEG share based on Cenovus’s closing share price Tuesday.
“We received support from the majority of MEG’s shareholders for our transaction. However, many MEG shareholders indicated that they would prefer to receive greater Cenovus share consideration, so that they can more fully participate in the upside of the combined company,” Cenovus chief executive Jon McKenzie said in a statement.
“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.”
The MEG board urged shareholders to support the Cenovus offer.
“We are pleased to announce the amending agreement with Cenovus, which provides improved transaction economics and greater opportunity for MEG shareholders to participate in substantial synergies through a higher equity component,” MEG board chair James McFarland said.
“This marks the third enhancement to the terms originally put forward by Cenovus, delivering a significant increase to an already attractive transaction.”
MEG shareholders were set to vote on Cenovus’s earlier offer this week, but that meeting has been postponed to Oct. 22. Approval of the offer requires a two-thirds majority vote by MEG shareholders.
Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta., while Strathcona also has operations in the region.
Strathcona is offering 0.80 of a share for each MEG share it does not already own. Under the Strathcona deal, MEG shareholders would own 43 per cent of the new entity.
This report by The Canadian Press was first published Oct. 8, 2025.