(World Oil) – MEG Power Corp.’s board turned down Strathcona Sources Ltd.’s sweetened supply to purchase the oil sands producer, recommending that shareholders persist with a rival supply from Cenovus Power Inc.
Strathcona, managed by former funding banker Adam Waterous, final week supplied 0.8 of a share for every share of MEG, valuing the Calgary-based goal at round C$7.6 billion ($5.5 billion), based mostly on Friday’s closing value.
The brand new supply is about 10% increased than Strathcona’s authentic takeover bid made in Might and tops the value Cenovus agreed final month to pay for MEG. Nevertheless it’s nonetheless inferior to Cenovus’s bid, which is usually money, MEG mentioned.
“The revised Strathcona supply stays essentially unattractive for MEG shareholders as a result of it fails to deal with or adequately compensate for the numerous dangers embedded in Strathcona shares,” MEG Chair James McFarland mentioned in an announcement. “MEG shareholders could be uncovered to inferior belongings, an unproven observe file, an overvalued Strathcona share value, important overhang threat, and governance threat.”
Strathcona says it owns 14% of MEG, and Waterous has pledged to vote his shares in opposition to the Cenovus deal when it comes earlier than shareholders on Oct. 9. Strathcona’s personal new supply expires on Oct. 20.
Cenovus CEO Jon McKenzie just lately dominated out elevating his firm’s supply for MEG in an interview on Sept. 10.
