-- Glass Lewis highlights that the Cenovus Transaction "offers clear
industrial logic, synergies, and diversification benefits that provide a
stronger long-term platform for MEG's assets"
-- Cenovus Transaction accelerates value realization from MEG's standalone
plan, delivering production capacity of 150,000 bpd at Christina Lake by
2028 through incremental capital investment
-- Cenovus Transaction provides MEG Shareholders with substantial cash and
highly liquid share consideration and upside participation in long-term
value creation potential
-- MEG Shareholders are encouraged to deposit their proxies and vote FOR
the Cenovus Transaction ahead of the proxy deadline of October 7, 2025 at
9:00 a.m. (Calgary Time)
-- For questions or assistance, contact Sodali & Co., 1.888.999.2785 or
1.289.695.3075 for banks, brokers, and callers outside North America,
assistance@investor.sodali.com
All amounts in Canadian dollars unless specified.
CALGARY, AB, Oct. 1, 2025 /CNW/ - MEG Energy Corp. (TSX: MEG) ("MEG", or the "Company") is pleased to announce that a second leading independent proxy advisory firm has provided a positive recommendation on the Cenovus Transaction (as defined below). Glass, Lewis & Co. ("Glass Lewis") has issued a report recommending shareholders of MEG ("MEG Shareholders") vote FOR the Cenovus Transaction. Glass Lewis has made this recommendation following an in-depth review of both the Cenovus Transaction and the revised unsolicited offer from Strathcona Resources Ltd. ("Strathcona"). On September 26, 2025, independent proxy advisory firm Institutional Shareholder Services Inc. also provided a recommendation that MEG Shareholders vote FOR the Cenovus Transaction.
In arriving at its recommendation for MEG Shareholders to vote FOR the Cenovus Transaction, Glass Lewis highlighted the following:
-- "MEG's board can be credited with conducting a process that ultimately
resulted in a higher offer than the initial unsolicited bid", while also
noting that MEG "pushed Cenovus to improve its offer twice";
-- The Cenovus Transaction is "expected to unlock significant operational
synergies, particularly given the contiguous nature of the properties";
-- Cenovus has "extensive experience with large-scale integrations and
appears better positioned to absorb MEG smoothly";
-- "Strathcona lacks Cenovus's operating history with MEG's flagship asset
and does not offer the same adjacency synergies", noting that
"Strathconacarries somewhat higher integration risk, as it is a
relatively newer entity and has not previously operated an asset on the
scale of MEG's Christina Lake";
-- "MEG shareholders could be accepting stock in Strathcona at a relatively
high valuation point, with downside risks if multiples contract"; and
-- "From a risk-adjusted standpoint, Cenovus's consideration therefore
appears more secure, offering both cash certainty and exposure to stable
equity for the balance".
Glass Lewis is a leading independent proxy voting and corporate governance advisory firm whose shareholder voting recommendations are subscribed to by many pension funds, investment managers, mutual funds, and other institutional shareholders.
Cenovus Transaction Overview
On August 22, 2025, MEG announced it had entered into an arrangement agreement (the "Arrangement Agreement") with Cenovus Energy Inc. (TSX: CVE) $(CVE)$ ("Cenovus") under which Cenovus will acquire all of the issued and outstanding MEG common shares (each, a "MEG Share") in a transaction that values MEG at $28.26 per MEG Share on a fully prorated basis at Cenovus's closing share price on September 30, 2025, representing an enterprise value of approximately $8.2 billion, including assumed debt (the "Cenovus Transaction").
The Cenovus Transaction provides MEG Shareholders with a choice to elect their preferred form of consideration and is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) where each MEG Shareholder will be entitled to elect to receive:
i. $27.25 in cash per MEG Share; or
ii. 1.325 Cenovus common shares (each whole share, a "Cenovus Share") per MEG Share; or
iii. a combination thereof,
in all cases, subject to rounding and proration based on the maximum amount of cash and the maximum amount of Cenovus Shares to be provided to MEG Shareholders, as set out in the Arrangement Agreement.
On a fully pro-rated basis, consideration per MEG Share represents approximately $20.44 in cash and 0.33125 of a Cenovus Share.
The Cenovus Transaction is subject to a number of conditions, including, among others: (a) approval by at least 662/3% of the MEG Shareholders represented in person or by proxy at a special meeting of MEG Shareholders (the "Meeting"); (b) approval of the Court of King's Bench of Alberta (the "Court"); (c) receipt of certain required regulatory and government approvals including the Competition Act Approval and the HSR Approval (each as defined in Arrangement Agreement); and (d) other customary closing conditions. The Competition Act Approval and the HSR Approval were obtained on September 25, 2025 and September 16, 2025, respectively.
The October 7, 2025 9:00 am (Calgary time) proxy voting deadline is approaching. The MEG Board of Directors recommends MEG Shareholders vote FOR the Cenovus Transaction.
MEG Shareholders will vote on the Cenovus Transaction at the Meeting which will be held on October 9, 2025 at 9:00 a.m. (Calgary Time), in person at Brookfield Place, 225 -- 6th Avenue S.W., Suite 1400, Calgary, Alberta, or through a live audio webcast accessible at https://meetings.lumiconnect.com/400-560-917-636. The password for the live audio webcast of the Meeting is "meg2025", case-sensitive.
Due to the time sensitivity and the Canada Post strike, MEG Shareholders are strongly encouraged to only vote online or by telephone. The proxy voting deadline is October 7, 2025 at 9:00 a.m. (Calgary time).
If you have not yet received your voting materials: Please contact your broker or investment advisor to obtain your 16-digit control number and vote immediately at www.proxyvote.com. Alternatively, contact Sodali & Co. at 1-888-999-2785 or assistance@investor.sodali.com for help casting your vote.
Registered Shareholders Beneficial Shareholders
Who? If your MEG Shares are held in If your MEG Shares are held with
your name and represented by a a broker,
physical certificate or DRS bank or other intermediary
advice
Telephone Call 1.866.732.VOTE (8683) (toll- Call the toll-free number on
free in North America) or your voting
1.312.588.4290 (outside North instruction form (VIF) and vote
America) using the 15-digit using the 16-
control digit control number provided
number found in their proxy therein
Online www.investorvote.com (requires www.proxyvote.com (requires your
your 15-digit control number from 16-digit
your broker) control number from your broker)
--------------------------------- --------------------------------
For questions or assistance voting their proxy, MEG Shareholders should contact Sodali & Co., 1.888.999.2785 or 1.289.695.3075 for banks, brokers, and callers outside North America, assistance@investor.sodali.com
MEG filed an information circular ("Circular") on September 12, 2025, providing further details on the Meeting and the Cenovus Transaction, including voting and election instructions, and MEG Shareholders are encouraged to review the Circular. MEG Shareholders are urged to vote well in advance of the Meeting.
In addition, a copy of the Circular and additional information on the Meeting can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/.
Advisors
BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal counsel, respectively, to the Company. RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to MEG's Special Committee.
Forward-Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Words such as "expect", "will", "could", "appear", "long-term", "potential", "condition", "subject to", and similar expressions suggesting future events or future performance are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to: the expected completion of the Cenovus Transaction and the terms thereof; anticipated benefits of the Cenovus Transaction including that the Cenovus Transaction offers clear industrial logic, synergies and diversification benefits that provide a stronger long-term platform for MEG's assets, accelerates value realization from MEG's standalone plan and provides MEG Shareholders with substantial cash and highly liquid share consideration and that MEG Shareholders will have an opportunity to participate in the upside potential of the combined company in the long-term; anticipated production capacity of 150,000 bpd at Christina Lake by 2028; expectations that the Cenovus Transaction will unlock significant operational synergies and the reasons therefor; expectations with respect to the disadvantages of the revised Strathcona offer including higher integration risk, lack of synergies and potential downside risk related to Strathcona shares; that the consideration under the Cenovus Transaction provides exposure to stable equity;
(MORE TO FOLLOW) Dow Jones Newswires
October 01, 2025 07:58 ET (11:58 GMT)