Husky Ends MEG Takeover Bid
(Bloomberg) -- Husky Energy Inc. abandoned its hostile bid to acquire MEG Energy Corp., which has a market value of C$2.53 billion ($1.9 billion), after failing to win support from shareholders and the board of the rival oil-sands producer.
The takeover offer didn’t secure the backing of the required minimum number of investors by the bid’s expiry on Wednesday, it said in a statement. The Calgary-based company opted not to extend the deadline and instead plans to proceed with the potential divestment of its retail business and Prince George Refinery.
Husky needed to win support from investors holding more than 50 percent of the outstanding shares to extend the offer by 10 days, people familiar with the matter had said earlier, asking not to be identified because the matter is private. A 10-day extension would have allowed it to pursue so-called follow-on tenders to gain the necessary support -- two thirds of the shares -- to take over MEG.
MEG has consistently spurned Husky’s advances, saying that its own plans to expand production at its Christina Lake oil-sands operations will provide more value for shareholders.
Husky had said the deal would have created a larger company that’s better equipped to weather the pipeline bottlenecks that have weighed on Canadian oil producers. The combined company would have produced more than 410,000 barrels a day and had about the same refining capacity, protecting the enterprise against price shocks for oil-sands crude.
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