Cenovus’s 9.8% stake in MEG is about votes, not control. The buys sit just under key thresholds and backstop a tight shareholder vote. Cenovus disclosed it now holds 25,000,000 MEG shares, or 9.8%, and said it intends to vote them for the deal. MEG’s amended standstill lets Cenovus go to 9.9% before the meeting, while the offer sits at C$29.80 per share.
Exploit Thresholds, Shape Outcomes
Canada’s early warning kicks in at 10% ownership, and a formal take‑over bid regime starts at 20%. Cenovus is threading that 9 point something needle. The Ontario Securities Commission spells out the 10% disclosure trigger and the 20% take‑over bid definition, which is why 9.8% is a signalling line, not control. Cenovus still published a release and said it would vote the shares for the transaction, which is the point.
As Jon McKenzie put it, “a compelling value creation opportunity for Cenovus shareholders.” That frames the purchase as vote insurance, not creeping control.
Stretch Timeline, Lock Support
On Oct. 21, MEG postponed the vote to Oct. 30 at Cenovus’s request, reporting about 63% of proxies in favour against a 66⅔% threshold. Pushing the date buys time to corral holdouts, lean on proxy advisor support, and let fresh purchases get counted. The amended standstill explicitly allows Cenovus to buy up to 9.9% pre‑meeting, which aligns with the stake build. As Darlene Gates said, “The Amending Agreement enables MEG shareholders to benefit from greater upside through a significant increase to the proportion of share consideration.” That pitch helps management rally votes while Cenovus quietly accumulates.
Cenovus’s offer path runs through shareholder and court approvals, not a hostile bid. Competition Act and U.S. HSR clearances were already obtained in September, but court approval and the two‑thirds vote still gate closing.
If the vote slips again, or if court approval wobbles, the strategy changes from vote‑gathering to deal repair. If opposition hardens and ISS or Glass Lewis shifts, or if a rival re‑emerges with binding terms, the 9.8% becomes less leverage and more stranded capital. Today, the incentives point one way, and the disclosures, price bump, and calendar control show Cenovus is using them.
