Tudor, Pickering, Holt on Monday reiterated its buy rating on the shares of Cenovus Energy (CVE.TO, CVE) with a C$28.00 price target after the oil producer and refiner sweetened its offer to acquire oil-sands producer MEG Energy (MEG.TO) and secured support for the offer from Strathcona Resources (SCR.TO), MEG's largest shareholder.

"Agreements increase certainty heading into the vote for a relatively neutral impact to accretion and pro-forma leverage metrics. On the heels of the 10/8 update through which CVE upped the bid for MEG (at that time, by TPHe ~4.6%) to what would have been TPHe ~$29.57/shr based on Friday's (10/24) closing prices all-around, CVE has further nudged its offer by TPHe ~1.5% to what equates to TPHe ~$30/shr even. No change to the 50% equity (0.6275 exchange ratio vs. prior 0.62) / 50% debt split, with the impact to accretion and pro-forma leverage metrics still rounding to TPHe ~8% and ~0.8x ND/EBITDA in 2026 and overall neutral relative to the prior increase. Importantly, with (i) this announcement and (ii) today's subsequent announcement by CVE to sell to SCR its Vawn thermal heavy oil asset (~5mbopd YTD) and certain undeveloped lands in W SK and AB (total proceeds C$150MM, 50% cash / 50% contingency payments), SCR has agreed to a voting support agreement under which it will vote its common shares in favor of the deal (special meeting date unchanged - Thu 10/30 at 9AM MT). SCR's ownership is unchanged from the ~14.2% that they last publicly announced, which has driven MEG's expectation to receive ~79% in favor of the CVE transaction, well above the >66 2/3% requirement," analyst Jeoffrey Lambujon wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 23.99, Change: +0.08, Percent Change: +0.33