Latest news with #Waterous
Calgary Herald
6 days ago
- Business
- Calgary Herald
Strathcona's hostile bid for MEG Energy called the 'largest investment in the Canadian oilpatch in a decade'
Article content The terms of the deal are the same as a proposal that was originally made to MEG in April, which was subsequently rejected by the company's board on May 13. MEG indicated at the time that it was not interested in pursuing a combination, according to Strathcona. Article content In response to Strathcona's filing Friday, MEG urged shareholders to wait until the board could provide a formal recommendation. Article content MEG's board has formed a special committee of independent directors to evaluate the offer, the company said Friday, noting that it would provide a recommendation within 15 days. Article content Some MEG shareholders have taken the view that Strathcona's bid doesn't sufficiently recognize the quality of the oilsand firm's Christina Lake assets and the potential of its undeveloped holdings at the Surmont Project in the southern Athabasca region of Alberta. Article content Waterous said the deal provides MEG shareholders with an immediate nine per cent premium on MEG's shares, stronger per-share earnings and cash flow, and the potential for a re-rating of Strathcona that would lower borrowing costs and boost its stock valuation. Article content Article content If the bid succeeds, MEG would be Strathcona's 11th major acquisition. Article content Some MEG shareholders have said they're more than willing to throw their support behind a private-equity player with a track record for dealmaking. Article content Cole Smead, chief executive officer of Smead Capital Management Inc., said agreeing to Strathcona's offer would give MEG shareholders a piece of Waterous' private-equity fund without paying any management or performance fees. Article content 'We just get to ride along as a public shareholder and we get to gain the benefits of his capital-allocation stewardship, and we don't pay any performance fees to him,' Smead said. 'There's a divide in the energy business between people who are good capital allocators and people who are not. Adam Waterous is one of the best.' Article content Article content Sayer Energy Advisors had been predicting a more subdued year for merger-and-acquisition activity in the Canadian upstream oil and gas sector compared to 2024, with total transaction values projected to be in the $15-billion range. Article content Then Whitecap Resources Inc. and Veren Inc. (formerly Crescent Point Energy Corp.) announced their multi-billion-dollar merger in March, followed by nearly $4 billion more in M&A activity in the second quarter so far. Article content 'We're already higher than what we thought we were going to be for all of 2025,' Tom Pavic, Sayer Energy Advisors' president, said. 'And I'm not even counting (Strathcona's bid for MEG) because we don't know how this is going to shake out.' Article content
Winnipeg Free Press
6 days ago
- Business
- Winnipeg Free Press
Strathcona formally launches takeover bid for oilsands peer MEG Energy
CALGARY – Strathcona Resources Ltd. has begun its formal takeover bid for fellow oilsands producer MEG Energy. Its offer comprises 0.62 of a common share of Strathcona and $4.10 in cash for each MEG share it doesn't already own. The offer is open until Sept. 15. MEG says its board and legal and financial advisers will consider the offer, and that a special committee of independent directors will assist. The target company is urging shareholders to take no action until it has made a recommendation, which it expects to do within 15 days. Strathcona also announced an equity commitment letter with Waterous Energy Fund, whose CEO Adam Waterous is executive chairman of Strathcona. Monday Mornings The latest local business news and a lookahead to the coming week. The fund owns almost 80 per cent of Strathcona shares, and the new investment is worth about $662 million. 'WEF's major further investment in Strathcona reflects our view that more than eight years into building Strathcona, our best years are in front of us. As part of the offer, we are asking MEG shareholders to join us as fellow shareholders in Strathcona and trust the Strathcona team as stewards of their capital,' Waterous said in a release Friday. 'We therefore believe it is important that we eat our own cooking, ensuring no one will be more focused on increasing Strathcona's value beyond current levels than WEF. We firmly believe Strathcona represents compelling value at this price with a large margin of safety, and that we and the partners in our fund will do very well over the long run.' This report by The Canadian Press was first published May 30, 2025. Companies in this story: (TSX: MEG, TSX: SCR)
Yahoo
6 days ago
- Business
- Yahoo
Strathcona formally launches takeover bid for oilsands peer MEG Energy
CALGARY — Strathcona Resources Ltd. has begun its formal takeover bid for fellow oilsands producer MEG Energy. Its offer comprises 0.62 of a common share of Strathcona and $4.10 in cash for each MEG share it doesn't already own. The offer is open until Sept. 15. MEG says its board and legal and financial advisers will consider the offer, and that a special committee of independent directors will assist. The target company is urging shareholders to take no action until it has made a recommendation, which it expects to do within 15 days. Strathcona also announced an equity commitment letter with Waterous Energy Fund, whose CEO Adam Waterous is executive chairman of Strathcona. The fund owns almost 80 per cent of Strathcona shares, and the new investment is worth about $662 million. "WEF's major further investment in Strathcona reflects our view that more than eight years into building Strathcona, our best years are in front of us. As part of the offer, we are asking MEG shareholders to join us as fellow shareholders in Strathcona and trust the Strathcona team as stewards of their capital," Waterous said in a release Friday. "We therefore believe it is important that we eat our own cooking, ensuring no one will be more focused on increasing Strathcona's value beyond current levels than WEF. We firmly believe Strathcona represents compelling value at this price with a large margin of safety, and that we and the partners in our fund will do very well over the long run." This report by The Canadian Press was first published May 30, 2025. Companies in this story: (TSX: MEG, TSX: SCR) The Canadian Press
Yahoo
6 days ago
- Business
- Yahoo
Strathcona's hostile bid for MEG Energy called the 'largest investment in the Canadian oilpatch in a decade'
The clock has officially started on Strathcona Resources Ltd.'s $6.7-billion hostile takeover bid for oilsands major MEG Energy Corp. Bypassing MEG's management, Strathcona has gone directly to shareholders with its cash-and-stock offer valued at $23.27 per share — representing a 9.3 per cent premium to MEG's closing price on May 15 — and they have until Sept. 15, 2025, to decide whether to accept the offer, according to a circular filed on Friday. The filing also confirmed and finalized a key element of financing for the deal, namely a $662-million equity commitment from Strathcona's controlling shareholder, Waterous Energy Fund (WEF), the Calgary-based private-equity firm founded and run by Strathcona chair and veteran oilpatch dealmaker Adam Waterous. The fund will buy 21.4 million shares at $30.92 each, providing the $662 million to fund the cash portion of the MEG offer and reduce the reliance on short-term debt. 'This is the largest single public or private-equity investment in the Canadian oil and gas patch in more than a decade,' Waterous said in an email. 'WEF backing up the truck on this acquisition is clear evidence that we believe that the creation of this new Canadian champion will provide compelling returns.' The terms of the deal are the same as a proposal that was originally made to MEG in April, which was subsequently rejected by the company's board on May 13. MEG indicated at the time that it was not interested in pursuing a combination, according to Strathcona. Some MEG shareholders have also taken the view that Strathcona's bid doesn't sufficiently recognize the quality of the oilsand firm's assets at Christina Lake, B.C., and the potential of its undeveloped holdings at the Surmont Project in Alberta and elsewhere. But Waterous may be counting on shareholders ignoring the modest premium in order to throw their support behind a private-equity player with a track record for dealmaking. Pivotal pipeline decision looms to determine fate of Canada's next big LNG terminal 'Energy is Canada's superpower,' says new minister Tim Hodgson 'WEF's major further investment in Strathcona reflects our view that more than eight years into building Strathcona, our best years are in front of us,' he said in a statement. 'We firmly believe Strathcona represents compelling value at this price with a large margin of safety, and that we and the partners in our fund will do very well over the long run.' • Email: mpotkins@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Calgary Herald
16-05-2025
- Business
- Calgary Herald
Waterous' Strathcona to make $4 billion bid for MEG Energy
Article content Canadian oil tycoon Adam Waterous' Strathcona Resources Ltd. announced plans for takeover bid of MEG Energy Corp. that values the oil sands company at about C$6 billion ($4 billion), advancing a push to become a major heavy crude producer. Article content The cash-and-stock offer, which will be formally filed in the next two weeks, will be for about C$23.27 per MEG Share, Calgary-based Strathcona said in a statement. That would value MEG's equity at about C$5.93 billion, based on the company's roughly 255 million shares outstanding. Article content Article content Taking over MEG would be the biggest acquisition yet for Strathcona, which former investment banker Waterous built through a flurry of deals over the past decade. The announcement comes the same day Strathcona said it agreed to sell its assets in the Montney shale formation in western Canada in a C$2.8 billion deal, a shift that makes the company a pure heavy oil producer. Article content Article content MEG Energy is a pure oil sands producer that pumps more than 100,000 barrels a day of heavy crude from its Christina Lake asset. The company's market capitalization of C$5.4 billion is slightly smaller than Strathcona's C$6.6 billion. Waterous' company is more diversified, with both oil sands operations and more conventional heavy oil production in Alberta and Saskatchewan. Article content In a statement Friday, MEG said it will consider and evaluate Strathcona's offer. The company has enlisted BMO Capital Markets as its financial adviser and Burnet, Duckworth & Palmer as its legal adviser. Article content Strathcona said it acquired about 9.2% of MEG's shares through open market purchases in the first and second quarters of this year. The company sent a takeover offer to MEG's board in late April, and the company's chairman responded about two weeks later that MEG wasn't interested. Article content MEG's Christina Lake operation would the largest single oil-producing asset for Strathcona, which had forecast production of about 120,000 barrels a day once its Montney deals close. While oil sands well operations are costly to build, once operating, they can continue producing crude for decades at $15 a barrel or less, without the need to regularly drill new wells, as is the case in shale formations such as the Permian basin of Texas. Article content Already, the deeper push into heavy oil from Strathcona's Montney deals was expected to help extend the company's reserve life to 50 years from 40 years and lower its breakeven oil price, TD Cowen analysts said in a note. Article content Strathcona said it has identified C$175 million in cost savings opportunities from combining with MEG, including overhead reductions, interest savings and operating synergies.
