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Under the proposal, Strathcona is offering 0.80 of a share per MEG share it does not already own. It values the proposal at $30.86 per share, up from its earlier bid valued at $28.02 per share. The new offer expires on Oct. 20. 

The Cenovus offer would see MEG shareholders choose between $27.25 in cash or 1.325 Cenovus common shares for each MEG share, subject to a limit of $5.2 billion in cash and 84.3 million Cenovus shares available.

Waterous calculates that amounts to a $3.9-billion gap for MEG shareholders, and he sees no recent precedent for a public company accepting such a deal. 

“Congratulations, MEG board — you are in first place in the last 20 years for leaving the most amount of money on the table for your shareholders. You win the prize,” Waterous said in an interview Monday. 

He noted that market reaction in the days following the Cenovus offer on Aug. 22 shows how undervalued it is. Cenovus stock jumped 10 per cent, but typically an acquirer’s share price would fall after such an announcement. 

MEG and Cenovus did not immediately provide comment. 

Waterous said there are key differences between the two offers that go beyond the headline purchase price. 

The Strathcona offer is shares, while Cenovus is offering some shares but is more heavy on cash. If MEG were to join forces with Strathcona, its shareholders would own 43 per cent of the combined entity. 

“These are two radically different paths. One is a cash exit, leaving Cenovus a $3.9-billion gain,” Waterous said. 

“And the second is you’re not getting off the train, you stay on the train and you try to capture that over time.”

MEG’s board has raised concerns about Strathcona’s majority shareholder — Waterous Energy Fund, which Waterous runs — selling its stake after the takeover.

Waterous said he’d be in it for the long haul and there is no intention of exiting after a potential deal closes. He said Monday that his fund would be willing to enter into a lockup agreement not to sell the shares if MEG were to support its bid. 

The Cenovus deal must be approved by a two-thirds majority vote by MEG shareholders expected to be held on Oct. 9. Strathcona says it intends to vote its 14.2 per cent interest in MEG against the deal.

Cenovus and MEG have side-by-side oilsands properties at Christina Lake south of Fort McMurray, Alta. Strathcona also has operations in the region, and Waterous said a combination with his firm would offer similar benefits. 

MEG shares were up 36 cents at $28.71 in late morning trading on the É«É«À² Stock Exchange on Monday.

This report by The Canadian Press was first published Sept. 8, 2025.

Companies in this story: (TSX:MEG, TSX:SCR, TSX:CVE)