Strathcona Resources has announced its intention to commence a takeover bid to acquire all issued and outstanding common shares of MEG Energy not already owned by Strathcona or its affiliates.

The offer includes 0.62 of a Strathcona share and C$4.10 in cash per MEG share, representing a 9.3% premium based on the closing price on 15 May 2025.

The total consideration offered by Strathcona Resources for MEG Energy shares is C$23.27 each, based on the recent closing share price on the Toronto Stock Exchange (TSX).

The bid reflects a combination of 82.4% in Strathcona shares and 17.6% in cash.

The offer is not contingent on financing, with the cash portion expected to be covered by bridge financing from a syndicate of lenders.

Waterous Energy Fund, holding a significant portion of Strathcona shares, plans to further invest through Waterous Energy Fund III by subscribing for an additional 21.4 million shares.

Post-offer, Strathcona anticipates having around 379 million shares outstanding and C$1.5bn in net debt, with ownership distributed between existing Strathcona and MEG shareholders, and WEF III.

The proposed acquisition aims to merge two heavy oil producers with similar netbacks and reserve life indexes, creating Canada's fifth-largest oil producer.

The combined entity is expected to have the financial scale for an investment-grade credit rating. Both Strathcona and MEG shareholders are projected to benefit from the merger, with significant accretion on key financial metrics and C$175m in identified annual synergies.

The Strathcona board of directors has unanimously approved the offer, and subject to TSX approval, shareholder consent for the share issuance is expected to be secured through WEF's written consent.

Additionally, Strathcona Resources has entered into definitive agreements for the sale of its assets in Montney, Canada, for approximately C$2.84bn.

The transactions include the sale of the Kakwa, Grande Prairie and Groundbirch assets to ARC Resources and Tourmaline Oil.

The Kakwa sale to ARC Resources is valued at C$1.69bn, comprising C$1.65bn in cash and roughly C$45m in assumed lease obligations.

"Strathcona Resources to acquire MEG Energy through takeover bid" was originally created and published by Offshore Technology, a GlobalData owned brand.

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