Canadian oil sands producer Strathcona Resources said today that its hostile takeover bid for MEG Energy has yet to elicit engagement from management, despite repeated efforts to start negotiations.
Strathcona's C$5.9bn ($4.2bn) bid for oil sands rival MEG has been open since 30 May as the Calgary-based company looks to roughly double its size to about 220,000 b/d. If successful, Strathcona would become Canada's fifth largest crude producer.
"We've had no engagement," executive chairman Adam Waterous said Friday on an earnings call. "We have asked for it multiple times and we have been ghosted."
MEG's board in June said the bid is insufficient and Strathcona's assets don't compare to MEG's. MEG's board also gave management the green light to pursue a strategic review of alternatives, including the pursuit of a superior offer.
"Strathcona's assets are scattered, lack scale and are located in less prolific areas with uncompetitive asset characteristics relative to MEG's Christina Lake," the board said on 16 June.
Strathcona countered days later saying MEG's board misunderstands Strathcona's business and its assets have achieved higher netbacks than MEG's in recent quarters.
Strathcona has been accumulating shares on the open market over the first half of 2025 and is MEG's second-largest shareholder with more than 9pc of shares as of 5 May.
Strathcona is 79.6pc owned by Waterous Energy Fund, which has been active in growing the company through acquisitions. In addition to expected operational synergies, an acquisition of MEG would accelerate Strathcona's plan to become an investment-grade company while increasing liquidity by adding Strathcona shares to more equity indexes, Waterous has said.
Strathcona is offering to pay 0.62 of a Strathcona share plus C$4.10 cash ($3) for each MEG share through 15 September.
