The battle for control of MEG Energy Corp. has taken a dramatic turn, as Cenovus Energy Inc. sweetened its acquisition bid, upping both the price and the proportion of stock offered to shareholders. The move, announced on October 8, 2025, comes amid mounting pressure from MEG investors who want a greater stake in the combined oilsands powerhouse, and just days before a crucial shareholder vote was set to take place.
Cenovus’s revised offer values MEG at approximately $8.6 billion, including assumed debt, a significant jump from its earlier $7.9 billion proposal. The new bid shifts the deal structure from 75% cash and 25% Cenovus shares to an even 50-50 split, granting MEG shareholders a bigger opportunity to participate in the future fortunes of the merged company. According to The Canadian Press, the change came after the majority of MEG’s shareholders voiced support for the transaction but also expressed a desire for more Cenovus stock in the mix.
"We received support from the majority of MEG’s shareholders for our transaction. However, many MEG shareholders indicated that they would prefer to receive greater Cenovus share consideration, so that they can more fully participate in the upside of the combined company," Cenovus chief executive Jon McKenzie said in a statement. "We listened to these comments and have changed the consideration under our offer to a maximum of 50 per cent cash and 50 per cent Cenovus shares, while increasing the aggregate purchase price."
This strategic adjustment is not happening in a vacuum. Cenovus faces stiff competition from Strathcona Resources Ltd., which already owns 14.2% of MEG and has tabled its own all-stock offer. Strathcona’s bid, offering 0.8 of a Strathcona share for each MEG share not already owned, is valued at about $29.67 per MEG share, based on October 7’s closing prices. Cenovus’s revised offer, meanwhile, comes in slightly higher at about $29.80 per share on a fully pro-rated basis. On the day of the announcement, MEG shares surged 6.4% to close at $30.05, reflecting investor optimism and the intensifying bidding war.
The shareholder meeting to vote on the Cenovus offer, originally set for October 9, has now been postponed to October 22. The new proxy deadline is October 20, which also marks the expiration of Strathcona’s rival bid. MEG’s board, for its part, is urging shareholders to back the Cenovus proposal. “Since the initial Cenovus transaction was announced, there has been strong recognition of the industrial logic and the synergy potential between MEG and Cenovus,” MEG chief executive Darlene Gates said in a press release. “The amending agreement enables MEG shareholders to benefit from greater upside through a significant increase to the proportion of share consideration, while also raising the initial transaction consideration.”
The industrial logic Gates refers to is rooted in geography and operations. Both Cenovus and MEG operate adjacent oilsands properties at Christina Lake, south of Fort McMurray, Alberta. Strathcona, too, has operations in the same region, making all three companies natural rivals—and, potentially, partners—in the area’s lucrative energy sector.
The origins of the takeover drama stretch back to April 2025, when Strathcona first approached MEG’s board with a cash-and-stock offer valued at $28.02 per share. After being rebuffed, Strathcona took its case directly to MEG shareholders, escalating the contest. In June, MEG’s board dismissed Strathcona’s initial bid as “opportunistic” and launched a formal review to solicit superior offers. Analysts, including those at Desjardins, quickly identified Cenovus as the most logical challenger, given its financial strength and strategic fit.
That prediction was borne out in August when MEG’s board accepted a friendly takeover proposal from Cenovus. Since then, the situation has only grown more complex. Last month, Strathcona amended its offer to be entirely stock-based, setting the stage for the current standoff.
Industry watchers have been keeping a close eye on every move, and the latest developments have only heightened the sense of anticipation. Cole Smead, CEO and portfolio manager at Smead Capital Management, is uniquely positioned to comment—he owns 1.1 million shares in MEG, as well as positions in both Cenovus and Strathcona. Smead told The Canadian Press that the initial Cenovus offer “was not going to succeed, so it had to be sweetened to have a chance.” He added, “Who wins these battles is who sees the most value. And whoever sees the value is always willing to pay the highest price.”
Smead’s perspective reflects a broader sentiment among MEG’s most bullish investors, who were disappointed with the initial Cenovus proposal and are now watching closely to see if Strathcona will counter. “It’s pointless to entertain the new Cenovus offer until shareholders see what Strathcona counters with,” Smead said. He believes it’s not a matter of if Strathcona will raise its bid, but rather how many steps it will take to outdo Cenovus and secure victory. One scenario he described is a classic bidding war, with each side sweetening its offer in turn. Another possibility, Smead said, is a so-called “bear hug,” where Strathcona might present “such a price that it kind of knocks people out of their chair ... It would overwhelm you.”
For now, the MEG board is firmly in Cenovus’s corner, pointing to the strategic benefits and the improved offer as reasons for shareholders to approve the transaction. Analysts at Desjardins expect the sweetened bid—explicitly described by Cenovus as its “best and final offer for MEG”—to win the day at the upcoming vote. Yet with Strathcona’s bid still on the table and the possibility of further escalation, nothing is set in stone.
The outcome of this high-stakes contest will have ripple effects beyond the boardrooms of the three companies. The oilsands sector, a cornerstone of Alberta’s economy, has long been a magnet for investors with strong convictions about the future of oil. MEG, as a “truly great” pure-play oilsands producer, according to Smead, has attracted its share of optimists—and the current bidding war is a testament to its perceived value and strategic importance.
As the October 22 shareholder meeting approaches, all eyes are on MEG, Cenovus, and Strathcona. The next move could come at any moment, and with billions of dollars and the future of a major Canadian energy player at stake, the drama is far from over.