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MEG to respond to Strathcona's revised offer for Canadian

oil

company by September 15

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Cenovus CEO has said no plan to raise MEG bid

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Strathcona owns 14.2% of MEG, opposes Cenovus deal

By Amanda Stephenson

CALGARY, Sept 12 (Reuters) - The executive chair of

Canadian oil company Strathcona Resources ( STHRF ) told Reuters

he is confident his newly sweetened offer to buy MEG Energy ( MEGEF )

will be enough to clinch a heated bidding war, in which

a key decision is expected by Monday.

Calgary-based MEG Energy ( MEGEF ) has said it will respond on or

before September 15 to the revised offer Strathcona made earlier

this week to acquire the company, which is Canada's last

remaining pure-play oil sands producer.

Under the terms of an existing agreement with larger company

Cenovus Energy ( CVE ), MEG must determine whether Strathcona's

new bid is superior to the deal it has already entered into with

Cenovus.

A decision in favour of Strathcona's new bid - which values MEG

at C$30.86 per share, above the C$27.79 valuation of Cenovus'

August cash-and-stock agreement - would mean Cenovus must

increase its own offer or give up on acquiring the company.

In an interview on Thursday evening, Strathcona's Adam

Waterous said he has received positive comments from MEG

shareholders since increasing his firm's offer.

"We have received overwhelming feedback from MEG

shareholders that they are not happy with the MEG board deal,"

Waterous said.

Cenovus CEO Jon McKenzie told Bloomberg News on Wednesday

that the company does not plan to raise its bid for MEG.

"Given the fact that Cenovus said they will not increase

their bid, the MEG board is going to have to do legal backflips

to continue to deem the Cenovus proposal superior to

Strathcona's and not terminate their agreement with them,"

Waterous said.

Strathcona had proposed C$23.27 per share in its initial hostile

bid in May. While Cenovus is offering a combination of cash and

shares, Strathcona is offering an all-stock deal - something

Waterous said gives MEG shareholders a better chance to

capitalize on future growth of the company.

MEG's Christina Lake oil sands project has become a prized

asset, as one of Canada's few large-scale expansion

opportunities.

Cenovus' offer would combine MEG's Christina Lake operations

with Cenovus' adjacent assets, creating one of Canada's largest

oil sands companies producing more than 720,000 barrels per day.

The smaller Strathcona, backed by private equity firm Waterous

Energy Fund, is one of North America's fastest-growing oil

companies and has been building its position in MEG, disclosing

that it owns or controls about 14.2% of shares.

Waterous has said his fund will vote against the Cenovus

transaction at an October 9 MEG shareholder meeting, where

two-thirds approval is required.