Q: What are your thoughts on Cenovus taking over Meg?
Should we sell into this news or will Strathcona "call and raise" the bid?
Should we sell into this news or will Strathcona "call and raise" the bid?
5i Research Answer:
It is a better bid, and with 75% cash. This gets MEG into a better range, and it is a friendly deal, and there are no conditions on financing. While anything is possible from SCR, we doubt it responds to this offer. It owns 10% of MEG and will make a nice profit, and we do not see it getting into a bidding war with CVE. We would be OK selling half of MEG on this news, keeping the balance for a period of time.