Voting of MEG Energy Corp. shareholders on the proposed takeover of Cenovus Energy Inc. postponed for another week.
MEG board chairman James McFarland suspended Thursday's meeting twice to discuss a last-minute “regulatory investigation” before adjourning it until Nov. 6.
It is the latest twist in a bitter, months-long takeover battle that has pitted oil sands giant Cenovus against smaller rival Strathcona Resources Ltd.
Strathcona abandoned its share offer earlier this month and on Monday said it would vote its 14% stake in MEG in favor of Cenovus' watered-down offer.
Also on Monday, Cenovus announced the sale of its Vawn heavy oil operation in Saskatchewan and certain undeveloped lands in western Saskatchewan and Alberta to Strathcona for $150 million, including $75 million in cash paid at closing and up to $75 million more, depending on future commodity prices.
“This meeting is being adjourned with the consent of Cenovus to allow MEG to disclose further information about the previously announced asset transaction between Strathcona Resources Ltd. and Cenovus and the associated MEG board process,” McFarland said.
The saga began in April when Strathcona approached MEG's board of directors with a proposal cash and stock takeover bid. Strathcona was rejected and a few weeks later sent the offer directly to MEG shareholders.
In June, MEG's board of directors called the offer “opportunistic” and called on shareholders to reject it while launching a review to find a better offer. Strathcona executive chairman Adam Waterous accused MEG of refusing to participate and of taking the position of “anyone but Strathcona”.
In August, MEG announced that its board of directors had accepted Cenovus' friendly takeover offer. The following month, Strathcona changed its offer to an all-share offer, arguing that the structure would give investors greater opportunity to benefit from future growth.
Cenovus raised the rate and offered a larger equity stake in early October, and the companies agreed to allow Cenovus to buy up to 9.9 percent of the target company's shares pending a shareholder vote.
Days later, Strathcona abandoned its bid, saying the terms of its offer could no longer be met, while some MEG shareholders condemned what they saw as unfair tactics in securing the deal with Cenovus.
Cenovus and MEG own adjacent oil sands properties at Lake Christina, south of Fort McMurray, Alta., and the companies tout the cost savings and efficiencies that will result from joining forces. Strathcona also has steam operations in the region.
If the deal goes through, it would add 110,000 barrels of daily oil sands production to Cenovus' portfolio, bringing it to 720,000 barrels of oil equivalent per day. Cenovus said production could rise to 850,000 barrels per day in 2028.
