Calgary-based Husky Energy made an offer to take over major Canadian oil sands producer MEG Energy for $2.6B USD in a cash-and-stock deal that would also assume MEG’s debt, putting the overall “enterprise value” of the transaction at $4.9B.
The move sets up a battle between a Canadian oil company linked to prominent Hong Kong billionaire Li Ka-Shing, and a Chinese energy giant (Cnooc) who owns a 12% stake in MEG.
We got a battle raging for Canada’s oil sands
And for good reason — when it comes to petrol huntin’, Canada’s oil sands are among the utmost premiere crude production hubs in the world. Combined, the two oil giants produce around 286k barrels a day from oil sands.
Bloomberg reports that if the board and shareholders of MEG accept Husky’s bid, the 2 companies would produce more than 410k barrels of global oil equivalent every day.
But MEG’s board of directors has remained cagey
While MEG declined to comment, Husky CEO Rob Peabody said the company already presented a takeover settlement to MEG this summer, but its offer was rejected.
Now, Peabody is set to travel to Toronto, Montreal, Boston, and New York over the next 2 weeks to visit with MEG’S shareholders and bring the deal on home.
According to Husky’s press release, the terms offer MEG a price 37% higher than the company’s most recent closing price, and would be Husky’s largest-ever takeover.