Li Ka-shing’s Husky makes C$3.3b MEG hostile bid

HONG KONG: Husky Energy Inc made a C$3.3 billion (RM10.66 billion) hostile bid for MEG Energy Corp, setting up a battle between the Canadian oil company linked to Hong Kong billionaire Li Kashing’s family and Chinese energy giant Cnooc Ltd, a major investor in the targeted oil-sands producer.

Husky chief executive officer Rob Peabody says he’s taking the cash and stock proposal directly to shareholders after MEG’s board spurned an earlier offer and his company remains prepared to speak with directors.

There was a compelling rationale in connecting MEG’s production from northwest Alberta’s oil sands with Husky’s refining system to gain the most value from each barrel of oil, he said.

“These companies fit hand-inglove,” said Peabody in an interview. “This deal would create a stronger Canadian energy company with more capital to invest.”

MEG investors would get C$11 a share, or 0.485 of a Husky share, equivalent to a 37 per cent premium over their stock’s previous close, said Calgary-based Husky in a statement on Sunday. Including debt, the deal has an enterprise value of C$6.4 billion.

MEG spokesman John Rogers confirmed that the company had received the unsolicited offer and said management and the board would review it to determine whether it’s in shareholders’ best interest.

In a statement yesterday, the company said no formal offer had been made and the board would evaluate it if and when the offer was received.