Husky offers to buy rival MEG for $6.4 billion
Husky Energy Inc said on Sunday it has made an unsolicited bid to acquire rival MEG Energy Corp in a deal valued at $6.4 billion, including debt.
The combined company would have total production of more than 410,000 barrels of oil equivalent per day (boepd) and refining and upgrading capacity of about 400,000 barrels per day (bpd), Husky said in a statement provided to Reuters.
The offer comes as many Canadian oil producers have struggled with transportation bottlenecks as output has surged, pushing Canadian heavy crude to near-historic discounts to U.S. light crude.
Husky Chief Executive Rob Peabody told Reuters that the combination of MEG’s top-quality assets and staff with its own production and downstream network would allow MEG to circumvent some of the effects from the Canadian crude discount, and provide benefits for both sets of shareholders.
The Husky offer comes less than two months into the tenure of Derek Evans, an industry veteran who took over as chief executive of MEG in August.
MEG Energy’s board will consider and evaluate the Husky’s unsolicited offer and the related takeover bid circular, if and when received, MEG said in a statement to Reuters.
MEG said it has formed a special committee of independent directors and has retained financial and legal advisers.
“No formal offer has been made,” MEG said. “MEG shareholders are advised to take no action with respect to any Husky offer until the Board of Directors has had an opportunity to fully review the offer, when received, and to make a recommendation as to its merits.”