Independent Proxy Advisory Firm ISS Recommends MEG Shareholders Vote in Favour of the Plan of Arrangement with Cenovus

Executive Summary

• ISS recommends MEG shareholders vote FOR the Cenovus Transaction, highlighting substantial synergy value and attractive cash/share consideration.
• The Cenovus Transaction values MEG at $28.60 per share, implying an enterprise value of approximately $8.3 billion (including debt).
• MEG has secured required Competition Act and HSR regulatory approvals; the proxy voting deadline is October 7, 2025.

Key Details

• Transaction Structure:
• Cenovus will acquire all outstanding MEG shares via a plan of arrangement under Alberta law.
• Shareholder election options per MEG share:
  1. $27.25 cash
  2. 1.325 Cenovus common shares
  3. Combination of the above (subject to rounding/proration).
• Valuation:
• Fully prorated basis: $28.60 per MEG share (based on Cenovus closing price September 25, 2025).
• Approximate consideration per share: $20.44 cash + 0.33125 Cenovus shares.
• Enterprise Value: Approximately $8.3 billion, including assumed debt.
• Regulatory Approvals Obtained:
• Competition Act Approval (Canada) – received September 25, 2025.
• HSR (U.S.) Approval – received September 16, 2025.
• Shareholder Vote Requirements:
• Minimum 66% of votes cast in favor at the special meeting (October 9, 2025).
• Court of King's Bench of Alberta approval also required.
• Proxy Voting Deadline: October 7, 2025, 9:00 a.m. Calgary time.
• ISS Rationale Highlights:
• Premium EV/NTM EBITDA multiple under the Cenovus deal.
• Opportunity for shareholders to participate in upside of combined company.
• Concerns raised about competing Strathcona offer (stock‑only consideration, low float, control concentration).
• Advisors:
• Financial Advisor – BMO Capital Markets (Cenovus side) & RBC Capital Markets (MEG Special Committee).
• Legal Counsel – Burnet, Duckworth & Palmer LLP (Cenovus) & Norton Rose Fulbright Canada LLP (MEG).
• Meeting Details:
• Special meeting of shareholders on October 9, 2025 at Brookfield Place, Calgary; also available via live audio webcast.

Notable Quotes

“By all accounts, there seems to be little doubt that a transaction with Cenovus should unlock substantial synergy value” – ISS recommendation statement.

All amounts are in Canadian dollars unless otherwise noted.