Husky Energy proposes to acquire MEG Energy for C$6.4 billion

Husky Energy has announced a proposal to acquire all of the outstanding shares of MEG Energy Corporation for implied total equity consideration of approx.C$3.3 billion (US$5 billion).

This proposal values MEG at an implied total enterprise value of C$6.4 billion, including the assumption of approximately C$3.1 billion of net debt.

Husky’s proposal delivers an immediate 44 percent premium to the ten-day volume-weighted average MEG share price of US$7.62 as of Friday, the 28^th September and a 37 percent premium to MEG’s closing price of US$8.03 as of that date.

Together Husky and MEG will create a stronger Canadian energy company, headquartered in Calgary.

The transaction will be accretive to Husky’s free cash flow, funds from operations, earnings and production on a per share basis.

The combined company will have total Upstream production of more than 410,000 barrels of oil equivalent per day (boe/day) and Downstream refining and upgrading capacity of approximately 400,000 barrels per day (bbls/day), providing for increased free cash flow per share, production growth and a basis for potential future dividend increases.

Source: Energy-pedia