Canada’s Cenovus Power Inc. elevated its takeover bid for rival MEG Power Corp. sooner or later earlier than MEG traders have been as a result of vote, signaling that the businesses’ authentic deal didn’t have sufficient shareholder assist.
The brand new cash-and-stock supply from Cenovus values MEG at C$29.80 per share, or C$7.6 billion ($5.4 billion), based mostly on Tuesday’s closing value. That’s a bump of about 5% from the earlier supply, which the MEG board agreed to in August.
Cenovus can also be providing extra inventory this time: the brand new proposed transaction is half shares, half money. The earlier bid would have paid shareholders three-quarters money, and was criticized by some traders for limiting the potential upside for MEG traders.
- Advertisement -
“Whereas the market will probably specific some disappointment from the raised bid, we predict the improved supply ought to assist approval from MEG holders and we do consider within the strategic deserves of the transaction,” JPMorgan analyst Arun Jayaram stated in a be aware to traders.
MEG’s largest shareholder is Strathcona Assets Ltd., which owns 14% of the corporate and has put ahead its personal competing all-stock takeover proposal, which MEG’s board turned down.
The MEG shareholder vote has been delayed till Oct. 22. Cenovus wants two-thirds assist for the takeover to succeed.
“We obtained assist from the vast majority of MEG’s shareholders for our transaction, Cenovus Chief Govt Officer Jon McKenzie stated in an announcement. “Nevertheless, many MEG shareholders indicated that they would favor to obtain better Cenovus share consideration, in order that they’ll extra absolutely take part within the upside of the mixed firm.”
A takeover of MEG, which operates a single oil-sands web site that produces about 100,000 barrels a day of crude, would place Cenovus as a dominant participant within the Christina Lake area of Alberta. Cenovus’s upstream manufacturing was about 832,000 barrels of oil equal per day within the third quarter.
Generated by readers, the feedback included herein don’t replicate the views and opinions of Rigzone. All feedback are topic to editorial assessment. Off-topic, inappropriate or insulting feedback will probably be eliminated.
