(Reuters) -Canadian oil producer MEG Energy ( MEGEF ) on Monday urged its shareholders to reject a nearly C$6 billion ($4.42 billion) hostile takeover offer from Strathcona Resources ( STHRF ), calling the bid inadequate and not in their best interest.

The board also launched a strategic review to explore alternatives that could lead to a better offer than MEG's current plan to be a standalone company.

In May, the Canadian oil and gas producer Strathcona Resources ( STHRF ) said it planned to launch a hostile takeover bid for MEG Energy ( MEGEF ), valuing its rival's shares at C$23.27 per share. MEG's last close was C$25.71.

Later, MEG advised its shareholders to not take action on the unsolicited takeover bid.

Since 2020, Strathcona, owned by Calgary-based private equity firm Waterous Energy Fund (WEF), has become one of the fastest-growing oil companies in North America through a series of acquisitions.

If the takeover were to go through, WEF would own 51% stake in the combined company, making it a vehicle for WEF and its investors to sell their material ownership over time, MEG Energy ( MEGEF ) said.

"This selling pressure, or even the perceived risk of such selling pressure, will place immediate and significant downward burden on the share price of the combined company for a prolonged period of time," the company said in a statement.

Strathcona Resources ( STHRF ) did not immediately respond to Reuters request for comment.

($1 = 1.3563 Canadian dollars)