MEG Energy postpones shareholder meeting to vote on merger with Cenovus (updated)

Strathcona Resources

21/10/2025 11:28

Recasts first paragraph, adds analyst comment and background throughout

Cenovus postpones meeting to secure more investor support

Strathcona opposes merger, owns 14% of MEG shares

MEG board supports revised bid despite contentious process

By Amanda Stephenson and Pooja  Menon

Oct 21 (Reuters) - A months-long fight for control of Canada's last pure-play oil sands company took a fresh twist on Tuesday, as MEG Energy Corp MEG.TO postponed a scheduled meeting at which shareholders were set to vote on its proposed takeover by Cenovus Energy CVE.TO.

     MEG said the meeting, which was set to take place on Wednesday, will now take place on October 30 after Cenovus exercised its contractual right to delay it.

The postponement will allow Cenovus more time to secure investor support for its offer, which it already sweetened once after some MEG shareholders criticized the initial bid for being too low.

Cenovus said on Tuesday about 63% of MEG common shareholders are in favor of the transaction, or more than 75% when excluding rival Strathcona Resources SCR.TO, which is presumed to vote against it. Cenovus must have two-thirds support for its offer, or just over 66%, in order to be successful.

     Strathcona, which is smaller than Cenovus and backed by private equity firm Waterous Energy Fund, owns or controls about 14% of MEG shares.

Strathcona said on October 10 it was abandoning its own hostile bid for MEG, after Cenovus raised its bid to C$8.6 billion ($6.17 billion), including debt.

     MEG's board supports Cenovus's revised bid, but the merger process has been more contentious than is typical for the Canadian oilpatch.

     Adam Waterous, executive chair of Strathcona, accused Cenovus of resorting to "fear and misrepresentation to keep an upstart at bay", and of "preying" on MEG's board, which he has publicly called weak.

     Waterous also criticized MEG's decision to waive a standstill agreement in order to allow Cenovus to purchase more shares in the company in the lead-up to the vote, raising its stake to nearly 9.8% in order to vote in favour of its own offer.

     Three MEG shareholders told Reuters last week they have filed complaints with Alberta's securities regulator over the lifting of the standstill agreement and what they view as the board's attempt to tilt the sales process in Cenovus's favour.

     Cenovus's deal is the best one on the table for MEG and will likely be approved, even if the company must work hard over the next week to canvass shareholders, said Anup Srivastava, a corporate governance expert at the University of Calgary's Haskayne School of Business.

     "If 63% have already voted in favor, that means the majority think it's worth it," he said. "It's just that not everybody votes - there are many passive shareholders out there."

     MEG's Christina Lake oil sands project has become an attractive asset for its long reserve life, low operating costs and potential for production growth.

It is one of the few large-scale expansion opportunities in Canada's oil sands, which are dominated by a small group of domestic players following the exit of most foreign companies over the past decade.

($1 = 1.4024 Canadian dollars)

(Reporting by Amanda Stephenson in Calgary and Pooja Menon in Bengaluru; Editing by Vijay Kishore and Nia Williams)

((mailto: amanda.stephenson@thomsonreuters.com))