Streetcona Useful resource makes stock-end-cost takeover gives for Meg Power
The Stretthkona Resource Limited Oysands producer is making a takeover stock-end offer for the producer Meg Energy Corp which gives importance to the company for about $ 5.9 billion.
The proposal comes after Strathankona, already owned by about 9.2 percent stake in the Meg, says it sent an acquisition proposal to the Meg Board of Directors in April, but was rejected earlier this week.
The company said in a news release, “The Meg Board’s rights to dismiss any proposal for Strathankona Meg, and there is no reason to believe that his decision to reject Strathankona’s proposal was not in good faith.”
“However, Stretthkona believes that the benefits of combining Stratchona and Meg are sufficient that MEG shareholders should have the opportunity to decide themselves.”
Meg said on Friday that its board of directors would consider the Strathankona offer and would urge the shareholders once received and until it has made a recommendation, the shareholders have been urged not to take any action.
Strathakona is offering 0.62 of Strathagona stock in a proposal of $ 23.27 per meg share on Thursday and $ 4.10 in cash per meg share in a proposal of $ 23.27 per meg share.
Meg’s shares closed at $ 21.30 on the Toronto Stock Exchange on Thursday.
Stretthkona stated that it is ready to join with the MEG board and will also support a strategic option process to determine whether any better transactions are available.
The company said, “Stratchona will be ready to participate in such a process creatively and good belief, including signing a mutual privacy agreement to share non-public information, provided that there is no need to sign a standstible agreement,” the company said.
Stretthkona stated that a combination with Meg would manufacture Canada’s fifth largest oil producer and fourth largest steam-assisted gravity drainage producer, with the largest proven oil reserves in North America.
It said that it has identified $ 175 million in annual coordination opportunities, including $ 50 million in overhead reduction costs, if the deal proceeds.
On Wednesday, Strathakona announced a series of three agreements to sell its assets in the Montany region, with a total price of $ 2.84 billion that would make it a pure-play heavy oil company.
It also said that it bought the Hardisti crude-rail terminal in Alberta for about $ 45 million.
