Cenovus announces amended agreement with increased price to acquire MEG Energy and provides update on third-quarter operating results

Executive Summary

• Cenovus announced an amended agreement to acquire MEG Energy, offering shareholders a choice of $29.50 cash or 1.240 Cenovus shares per MEG share (max $3.8 bn cash and 157.7 m Cenovus shares), resulting in a roughly 50/50 cash‑share mix.
• The amendment raises the fully pro‑rated consideration to about $29.80 per MEG share, an increase of ~$1.32 over the original terms, and is presented as Cenovus’s “best and final offer.”
• Key regulatory approvals have been obtained; the special shareholders’ meeting has been postponed to Oct 22, 2025, giving MEG investors time to vote on the amended deal.

Key Details

• Consideration Options (per MEG share):
• $29.50 in cash or 1.240 Cenovus common shares (subject to rounding/pro‑ration).
• Maximum cash outlay: $3.8 bn; maximum Cenovus shares issued: 157.7 m.
• Pro‑rated Mix: Approximately 50% cash, 50% Cenovus shares on a fully pro‑rated basis (≈ $14.75 cash + 0.620 Cenovus share per MEG share).
• Valuation Impact: Fully pro‑rated value ≈ $29.80 per MEG share, up ~$1.32 from the original arrangement price based on Cenovus closing price (Oct 7, 2025).
• Standstill Amendment: Allows Cenovus to purchase up to 9.9% of MEG’s outstanding common shares; any acquired shares will be voted in favour of the transaction.
• Share Repurchase Plan: With reduced cash component, Cenovus intends to increase planned share repurchases over upcoming quarters if the deal closes.
• Special Meeting Rescheduling: Originally set for Oct 9, 2025 → now Oct 22, 2025 at 9 a.m. MT (11 a.m. ET). MEG shareholders directed to MEG’s release for voting instructions and deadlines.
• Regulatory Approvals: Received from the Canadian Competition Bureau and the U.S. Federal Trade Commission.

Third‑Quarter 2025 Operational Update (included in same release)

• Record upstream production: ≈ 832,000 BOE/d, with ≈ 640,000 bbl/d from Oil Sands.
• Record downstream crude throughput: ≈ 712,000 bbl/d (U.S. refining ≈ 606,000 bbl/d; utilization 98.8%).
• Completed sale of 50% interest in WRB Refining LP to Phillips 66 for ≈ $1.8 bn cash (received Oct 1).
• Net debt: ≈ $5.3 bn pre‑sale, ≈ $3.5 bn post‑sale.
• Share repurchases in Q3: 21.5 m shares for $512 m (avg $23.81/share); total Q3 purchases 40.4 m shares for $900 m (avg $22.31/share).

Notable Quotes

“We received support from the majority of MEG’s shareholders for our transaction… we have changed the consideration … to a maximum of 50% cash and 50% Cenovus shares, while increasing the aggregate purchase price.” – Jon McKenzie, President & CEO, Cenovus Energy Inc.