MEG-Cenovus deal clears key shareholder vote after delays

CALGARY – Three vote delays, two sweetened bids and countless other twists and turns later, shareholders in MEG Energy Corp. have given their blessing to an $8.6-billion takeover by Cenovus Energy Inc. 

More than 86 per cent of shares represented at a special meeting Thursday were voted in favour of the deal, well above the two-thirds majority required for it to pass, said MEG chairman James McFarland. 

He thanked shareholders for their “patience over the past couple of weeks.”

The meeting was initially supposed to be held on Oct. 9, but was put off for two weeks when Cenovus rejigged its offer for the first time. It was then postponed another week when it appeared that offer still did not have enough shareholder support to pass. Then last week, a meeting to weigh the offer — sweetened for a second time — was adjourned until Thursday due to a last-minute regulatory complaint.

The saga began in April when another company, Strathcona Resources Ltd., approached the MEG board with a cash-and-stock takeover bid. Strathcona was rebuffed and took the offer directly to MEG shareholders weeks later. 

In June, MEG’s board called the bid “opportunistic” and urged shareholders to reject it as it launched a review to find a superior offer. Strathcona executive chairman Adam Waterous accused MEG of refusing to engage and taking an “anyone but Strathcona” stance. 

In August, MEG announced its board had accepted a friendly takeover offer from Cenovus. The following month, Strathcona amended its offer to one based entirely on stock, arguing that structure would give investors greater opportunity to benefit from future growth. 

Cenovus, saying it was heeding shareholder feedback, upped its bid and offered a greater equity share in early October. 

Strathcona abandoned its bid a few days later, saying the conditions of its offer could no longer be satisfied. 

Last week, Cenovus again increased its offer and Strathcona agreed to vote its 14.2 per cent MEG stake in favour of the deal. 

The same day, those companies announced Strathcona had agreed to buy the Vawn thermal heavy oil operation in Saskatchewan from Cenovus and some undeveloped properties in western Saskatchewan and Alberta for up to $150 million. 

That side-deal was the basis for the most recent vote delay, as McFarland said more time was needed to disclose information about it to MEG shareholders. Cenovus CEO Jon McKenzie later said a former MEG employee with 4,000 shares had lodged an unspecified complaint.

MEG said in a news release Thursday that the parties “are pleased to have resolved their differences on amicable terms” on that matter. It said no one else has given notice that they intend to oppose the deal when it’s before the Court of King’s Bench later this month. 

The deal is expected to close this month following final court approval and other customary conditions. 

Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta., and the companies have touted the cost-savings and efficiencies that would result from joining forces. Strathcona also has steam-driven operations in the region.

The deal would add 110,000 barrels of daily oilsands production to Cenovus’ portfolio, bringing it to 720,000 boe/d. Cenovus has said output could grow to 850,000 boe/d in 2028.

This report by The Canadian Press was first published on Nov. 6, 2025. 

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