On May 15, 2025, Strathcona Resources Ltd. announced its intention to launch a take-over bid to acquire all outstanding shares of MEG Energy Corp. not already owned by Strathcona or its affiliates. The proposed offer includes 0.62 of a Strathcona common share and $4.10 in cash per MEG share, equating to a total consideration of $23.27 per MEG share, based on Strathcona’s TSX closing price on the same day. This represents a 9.3% premium to MEG’s closing share price. The offer will not be subject to any financing conditions, with the cash portion backed by a bridge financing commitment. Waterous Energy Fund, which holds 79.6% of Strathcona, intends to increase its investment via its WEF III fund by subscribing for 21.4 million Strathcona shares through subscription receipts.

The proposed combination would merge two large-scale SAGD-focused heavy oil producers, positioning Strathcona as Canada’s fifth-largest oil producer and fourth-largest SAGD operator. Strathcona projects approximately $175 million in annual synergies and expects the combined entity to have about 379 million shares outstanding and approximately $1.5 billion in net debt. Strathcona anticipates owning 56.5% of the combined entity, MEG shareholders 37.8%, and WEF III 5.6%. Strathcona’s legal counsel includes Blake, Cassels & Graydon LLP and Skadden, Arps, Slate, Meagher & Flom LLP, with financial advisors Scotiabank and TD Securities. Torys LLP is advising Strathcona’s Special Committee on the WEF III investment. MEG is advised by BMO Capital Markets and Burnet, Duckworth & Palmer LLP.