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(Bloomberg) – MEG Vitality Corp.’s board turned down Strathcona Assets Ltd.’s sweetened provide to purchase the oil sands producer, recommending that shareholders stick to a rival provide from Cenovus Vitality Inc.
Picture: Cenovus Vitality
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), primarily based on Friday’s closing worth.
The brand new provide 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. But it surely’s nonetheless inferior to Cenovus’s bid, which is generally money, MEG mentioned.
“The revised Strathcona provide stays basically unattractive for MEG shareholders as a result of it fails to handle or adequately compensate for the numerous dangers embedded in Strathcona shares,” MEG Chair James McFarland mentioned in a press release. “MEG shareholders can be uncovered to inferior belongings, an unproven observe file, an overvalued Strathcona share worth, important overhang danger, and governance danger.”
Strathcona says it owns 14% of MEG, and Waterous has pledged to vote his shares towards the Cenovus deal when it comes earlier than shareholders on Oct. 9. Strathcona’s personal new provide expires on Oct. 20.
Cenovus CEO Jon McKenzie just lately dominated out elevating his firm’s provide for MEG in an interview on Sept. 10.
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