M&A - MEG ENERGY CORP

Form Type: 425

Filing Date: 2025-05-21

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925051183

Filing Summary: Strathcona Resources Ltd. has proposed an acquisition of MEG Energy Corp. for an estimated value of six billion dollars. This acquisition entails purchasing all outstanding common shares not already owned by Strathcona. The offer includes a cash and stock option, with a premium of 9.3% over MEG's recent trading price. Strathcona views MEG as a complementary asset due to similar business models and production capabilities in western Canada. The Executive Chairman of Strathcona, Adam Waterous, described the fit between the two companies as nearly identical. The acquisition aims to leverage economies of scale, reducing overhead and achieving operational synergies. It is highlighted that 82% of the consideration offered to MEG shareholders will be in shares, with the remaining 18% in cash. Strathcona has requested MEG to conduct a strategic alternatives process to explore any potentially better offers. Additionally, potential cost savings of approximately 175 million dollars annually are anticipated from the merger. Strathcona holds a 9.9% stake in MEG and aims for the combined entity to achieve an investment grade credit rating, improving financial terms for the new organization. The document includes a cautionary note that forward-looking statements are based on current expectations and are subject to risks and uncertainties that could affect actual outcomes.

Form Type: 425

Filing Date: 2025-05-21

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925051184

Filing Summary: Strathcona Resources Ltd. has proposed a hostile takeover bid for MEG Energy Corp. valued at C$5.93 billion (approximately $4.25 billion). The all-cash-and-stock offer includes a proposal of 0.62 of a share and C$4.10 in cash for each MEG share, which equates to a total value of C$23.27 per share, representing a 9.3% premium over MEG's latest closing price. Some analysts predict that MEG may not accept the offer, and competing bids from larger oil sands companies could emerge. Strathcona, which currently holds nearly 9% of MEG's shares, made its initial offer on April 28, which was declined, but remains open to discussions. The combined operations of Strathcona and MEG would produce around 295,000 barrels of oil per day, with potential annual cost savings of C$175 million cited. The deal's funding will involve a bridge loan, and if successful, MEG shareholders would own approximately 37.8% of the new combined entity. Strathcona has achieved rapid growth through acquisitions since 2020 and believes consolidation is necessary for Canadian oil sands operators to remain competitive in evolving markets.

Form Type: 425

Filing Date: 2025-05-21

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925051200

Filing Summary: Strathcona Resources Ltd. announced an updated presentation regarding their acquisition offer for MEG Energy Corp. on May 20, 2025. The offer consists of 0.62 Strathcona shares plus $4.10 cash for each share of MEG, totaling $23.27 per MEG share, which represents a 9.3% premium over MEG's unaffected share price of $21.30 as of May 15, 2025. Strathcona plans to formalize this offer via a take-over bid, valid for a minimum of 105 days. The company currently holds 23.4 million shares of MEG, equating to about 9.20% of its outstanding shares. Post-transaction, Strathcona expects to have around 379 million shares outstanding and about $1.5 billion in net debt. The combination aims to unite both companies into Canada’s fifth-largest oil producer, enhancing operational efficiencies and delivering significant shareholder value through projected synergies and enhanced production capabilities. The offer is subject to regulatory approval and specific tender conditions, including substantial acceptance from MEG shareholders.

Form Type: 425

Filing Date: 2025-05-19

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925050142

Filing Summary: Strathcona Resources Ltd. has announced its intent to make an offer for all outstanding common shares of MEG Energy Corp. that it does not already own. This proposal follows Strathcona's recent release of its financial results for Q1 2025, during which it outlined its strategic shift from the Montney business to focus on complementary acquisitions like MEG. The conference call emphasized the operational synergies expected from the combination of both companies, positioning Strathcona to become a significant player in the North American oil industry, aiming to reach 219,000 barrels per day, and becoming the fifth-largest oil producer in Canada. The acquisition is characterized by a proposed premium of 9.3% for MEG shareholders, and Strathcona anticipates generating annual synergies of $175 million, primarily from reduced operating costs and improved efficiencies. However, Strathcona has not yet made a formal offer, and believes that integration will enhance their overall market position. Details of the Offer will be formally filed with the SEC under a registration statement which will include the official offer and related documents for MEG shareholders to review. The management discusses the unique position of the acquisition, where both companies benefit from the transaction, unlike typical M&A scenarios where the larger company reaps the majority of benefits. Strathcona highlights that the expected combination will allow for optimized operations and substantial savings, emphasizing their belief in a robust future combining the strengths of both companies.

Form Type: 425

Filing Date: 2025-05-16

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925049922

Filing Summary: Strathcona Resources Ltd. has announced its intention to commence a take-over bid to acquire MEG Energy Corp. Strathcona will offer to buy all outstanding common shares of MEG not owned by Strathcona or its affiliates at a rate of 0.62 of a Strathcona Share and $4.10 in cash per MEG Share. The total consideration amounts to $23.27 per MEG Share, reflecting a 9.3% premium based on MEG's closing share price on May 15, 2025. The bid will not have a financing condition and will be financed through a bridge financing commitment. Strathcona expects to possess a 56.5% ownership of the combined entity post-acquisition, which will be Canada's fifth largest oil producer. The acquisition aims to unify high-quality assets and enhance shareholder value through significant operational synergies projected at $175 million annually. The offer has received unanimous approval from Strathcona's Board and aims to allow MEG shareholders the opportunity to decide on the proposed combination, which Strathcona advocates for despite the MEG Board's earlier dismissal of a formal proposal. Full details will be revealed in a formal offer to purchase and take-over bid circular.

Form Type: 425

Filing Date: 2025-05-16

Corporate Action: Acquisition

Type: New

Accession Number: 000110465925049924

Filing Summary: Strathcona plans to acquire MEG Energy Corp by offering 0.62 Strathcona shares plus $4.10 cash for each MEG share, resulting in a total consideration of approximately $23.27 per MEG share. This offer represents a 9.3% premium based on MEG's unaffected share price of $21.30 as of May 15, 2025. The transaction is structured as a formal take-over bid and will remain open for at least 105 days. Upon completion, Strathcona anticipates approximately 379 million shares outstanding and net debt of about $1.5 billion. The offer requires more than 50% of MEG’s outstanding shares to be validly tendered. Strathcona aims to achieve significant synergies from the merger, projecting a combined entity to be Canada's fifth-largest oil producer. The proposed merger is expected to create strong accretion to shareholders of both MEG and Strathcona.