Husky Energy Inc.'s proposal to buy out oil sands producer MEG Energy Corp. expired Jan. 16 without meeting the minimum tender condition for the deal, prompting Husky to cancel its C$6.4 billion offer.
Husky, a Calgary, Alberta-based refiner and heavy oil upgrader, chose not to extend its offer to MEG Energy due to lack of support from MEG Energy's board and shareholders, according to a Jan. 17 news release. The offer needed at least 66.67% of MEG shares tendered before Husky would take up shares to complete the acquisition. Husky will return to shareholders all MEG shares tendered to the offer.
Husky also noted that there have been "negative" developments since they launched their offer, including the government of Alberta's enforcement of production cuts in Alberta, and lack of progress on Canadian oil export pipeline developments. The company now intends to shift its focus to capital discipline and executing its five-year plan that involves higher-margin production growth to lower oil prices needed to break even, Husky CEO Rob Peabody said in the release.