Below an amended provide introduced Monday, Strathcona is providing 0.80 of a share per MEG share it doesn’t already personal. Its earlier overture was a mixture of money and inventory. The most recent provide is value $30.86 per share, up from its earlier bid valued at $28.02 per share.
The Cenovus provide would see MEG shareholders select between $27.25 in money or 1.325 Cenovus widespread shares for every MEG share, topic to sure limits.
Strathcona claims MEG deal fingers Cenovus the upside, not shareholders
Strathcona is looking the Cenovus deal “lopsided” and the MEG board’s sale course of “damaged” for accepting that provide.
“Congratulations, MEG board—you might be in first place within the final 20 years for leaving probably the most sum of money on the desk on your shareholders. You win the prize,” Strathcona govt chairman Adam Waterous stated in an interview Monday.
Waterous famous Cenovus’ inventory jumped 10% within the days following information of its take care of MEG, however usually an acquirer’s share worth would fall after such an announcement. Waterous says that equates to a $3.9-billion acquire in Cenovus’ inventory market worth that MEG shareholders are principally not capable of take pleasure in, as they might solely personal 4% of a post-takeover firm.
Examine the very best TFSA charges in Canada
New bid highlights alternative between short-term money and long-term positive factors
Below the Strathcona deal, MEG shareholders would personal 43% of the brand new entity.
“These are two radically completely different paths. One is a money exit, leaving Cenovus a $3.9-billion acquire,” Waterous stated. “And the second is you’re not getting off the prepare, you keep on the prepare and also you attempt to seize that over time.”
The brand new provide expires on Oct. 20. MEG and Cenovus didn’t reply to a request for touch upon Monday.
MEG’s board has raised issues about Strathcona’s majority shareholder—Waterous Power Fund, which Waterous runs—promoting its stake after the takeover. Waterous stated he’d be in it for the lengthy haul and there’s no intention of exiting after a possible deal closes. He stated Monday that his fund can be prepared to enter right into a lockup settlement to not promote the shares if MEG have been to help its bid.
Waterous slams MEG board, says Cenovus deal shall be a enterprise college case research
The Cenovus deal have to be authorised by a two-thirds majority vote by MEG shareholders anticipated to be held on Oct. 9. Strathcona says it intends to vote its 14.2% curiosity in MEG towards the deal.
“I’ve not spoken to a single MEG shareholder who’s pleased with the MEG board take care of Cenovus,” Waterous stated. “That is going to be taught in enterprise faculties about boards of administrators’ dereliction of fiduciary responsibility.”
Cenovus and MEG have side-by-side oilsands properties at Christina Lake, south of Fort McMurray, Alta. Strathcona additionally has operations within the area, and Waterous stated a mixture along with his agency would provide related advantages.
MEG shares rose two per cent, or 58 cents, to $28.93 in early afternoon buying and selling on the TSX. Cenovus inventory fell 9 cents or about half a proportion level to $22.02, whereas Strathcona fell 62 cents, or 1.6% to $37.80.
Get free MoneySense monetary ideas, information & recommendation in your inbox.
Learn extra information:
