#Canada #Calgary #Strathcona Resources #Equity Investment #MEG Energy

Strathcona Resources Launches Offer to Acquire MEG Energy Corp.

Strathcona Resources Ltd. has made headlines in the energy industry by officially commencing its offer to acquire all issued and outstanding shares of MEG Energy Corp. This strategic move is poised to create a substantial shift within the oil sector, benefitting both companies and their stakeholders.

The deal presented includes 0.62 common shares of Strathcona and $4.10 cash for each MEG share, valuing the acquisition as an appealing prospect for MEG shareholders. Strathcona's notice detailing the offer has been circulated in The Globe and Mail and Le Devoir, with additional comprehensive information posted on the company's website and filed with Canadian securities regulators.

Open for acceptance until September 15, 2025, this offer will allow MEG shareholders to participate in a fruitful merger while securing immediate cash compensation. Significantly, Strathcona has secured the backing of Waterous Energy Fund, which holds approximately 79.6% of Strathcona's shares. Their commitment includes a substantial equity investment of around $662 million, primarily aimed at enhancing shareholder value following the merger with MEG.

Adam Waterous, Executive Chairman of Strathcona, articulated the strategic foresight behind the acquisition. According to him, the engagement of MEG shareholders in their journey is critical. He emphasized that the exclusive focus of WEF will be on maximizing Strathcona's value in the forthcoming years, promoting both immediate and long-haul advantages for investors.

Offer Details and Conditions

The acquisition is contingent upon specific conditions being met, including:

• - Valid deposit of more than 50% of MEG Shares under the offer.
• - A minimum of 66⅔% of outstanding MEG Shares must be validly deposited.
• - No significant adverse changes related to MEG's business or assets.
• - All necessary governmental and regulatory approvals must be secured.

Strathcona will fund its cash component through bridge financing commitments, showcasing the financial backing and strategic planning involved in this transaction. If the stipulated conditions are satisfied, Strathcona aims to acquire any MEG shares not deposited under the offer, ensuring the complete amalgamation of both firms.

Strathcona’s management encourages MEG shareholders to understand the transformative potential of this offer, underscoring the full details available in the Offer and Circular documentation. With such strategic maneuvers, Strathcona sets an ambitious tone for its intended merger, highlighting the importance of investor engagement and shared value creation.

Completing the Equity Investment

Through an equity commitment signed with WEF, Strathcona plans to issue approximately 145 million new shares as part of the offer. This includes 143 million shares for MEG shares deposited in the offer and a further 2 million shares for MEG equity compensation awards. Such an expansion potentially positions WEF to hold about 51% of Strathcona post-transaction, establishing a strong shareholder dynamic.

To ensure transparency, WEF's involvement and the structured acquisition will be publicly disclosed, with Scotiabank and TD Securities acting as financial advisers. Legal representatives such as Blake, Cassels and Graydon LLP are involved in navigating the complexities of the deal.

Conclusion

The acquisition of MEG Energy Corp by Strathcona Resources Ltd. represents a critical turning point in the energy sector. By blending resources and expertise, the merger aims to elevate both companies to new heights in operational effectiveness and market reach. This announcement signals not only a major shift in corporate strategy but also a proactive approach to ensuring long-term shareholder value within the competitive landscape of the oil industry.

For further inquiries or assistance regarding share deposition, MEG shareholders can reach out to the Information Agent, Laurel Hill Advisory Group. The documentation concerning the offer will also be accessible on Strathcona's official platforms, cementing their commitment to informed stakeholder engagement.