Cenovus delays MEG Energy shareholder vote of takeover offer

CALGARY – Cenovus Energy Inc. says a vote by MEG Energy Corp. shareholders on its proposed takeover offer is being postponed after it appeared approval might fall short of the required two-thirds majority.

The company said Tuesday at the time of the postponement that about 63 per cent of the MEG shares represented by proxy or expected to be voted in person at the meeting backed the bid.

A meeting that had been set for Wednesday is now to be held on Oct. 30. The deadline for submitting proxies has been extended to Oct. 29.

“Cenovus would like to reiterate that the transaction terms represent Cenovus’s best and final offer, and is the only corporate transaction currently available to MEG shareholders,” the oilsands giant said in a statement.

Independent oilsands producer Strathcona Resources Ltd., which owns a 14.2 per cent stake in MEG and recently dropped its own hostile all-stock offer for that company, is assumed to have voted its shares against the deal, Cenovus added. 

The Cenovus proposal, which is a mix of cash and stock that values MEG at about $8.6 billion, including assumed debt, has the backing of the MEG board of directors. 

Cenovus has purchased a 9.8 per cent stake in MEG. 

Dane Gregoris, who leads the oil and gas research group at Enverus, said he expects Cenovus can get enough shareholders on board for the deal to pass. 

“It’s likely a function of talking to every shareholder, trying to convince them to vote,” he said. “Usually the biggest hold up to these processes are people just not voting.”

With oil prices hovering at a lacklustre US$57 a barrel, Cenovus is willing to pay a reasonable price for MEG, Gregoris added. 

“However messy it was, it did actually work out quite well for MEG shareholders.”

MEG said investors who have not already voted should vote their shares for the deal by the revised deadline, while those who previously voted against the deal are recommended to revoke their prior vote and support the offer.

This is the second time the vote by MEG shareholders has been delayed. Shareholders were set to vote on the deal earlier this month, but was delayed after Cenovus raised its offer and increased the proportion of shares available under its bid. 

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.

Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management, said some long-term MEG shareholders might be reluctant to tender at what they see as a “mild” premium. 

If the Cenovus deal goes through after MEG’s more than quarter-century as an independent oilsands player, “it’s kind of a sad end to a long story,” he said.  

“Cenovus’ offer clearly makes strategic sense, but for MEG shareholders, the question really is whether the premium that’s on the table truly compensates them for that company’s long-term potential.”

This report by The Canadian Press was first published Oct. 21, 2025.

Companies in this story: (TSX: CVE, TSX: MEG, TSX: SCR)