Husky Energy's Proposed Acquisition of MEG Energy

Our proposal is in the best interests of Husky and MEG shareholders, employees and stakeholders: immediate 44 percent premium for MEG shareholders, participation in Husky's dividend and a stronger balance sheet enabling more free cash flow.

Letter to MEG Shareholders

On behalf of the Board of Directors of Husky Energy, you are invited to consider our compelling cash and share offer to acquire all outstanding shares of MEG Energy for $11 in cash or 0.485 of a Husky share per MEG share held, subject to a maximum aggregate cash consideration of $1 billion and a maximum aggregate number of Husky shares issued of approximately 107 million. The offer is contained in the Offer to Purchase and Circular.

The Offer is open for acceptance until 5 p.m. (Toronto time) on Wednesday, January 16, 2019. Please carefully consider this Offer and read the Offer to Purchase and Circular, which contains important information regarding Husky and the terms and conditions of the Offer.

Husky believes that the Offer represents a compelling return proposition for MEG shareholders to maximize the value of their investment through a combined Canadian energy company with a strong balance sheet, an integrated business model and a rich portfolio of low cost, higher margin projects - all of which contribute to substantially more funds from operations and free cash flow with much greater stability. The benefits of this transaction for MEG shareholders include:

  • An immediate 44 percent premium to the 10-day volume-weighted average MEG share price of $7.62 as of September 28, 2018 and a 37 percent premium to MEG's closing price of $8.03 as of that date.
  • Stronger balance sheet enabling more free cash flow to be directed to shareholder returns and growth investments
  • Increased stability of funds from operations and free cash flow due to integration, expanded market access and high-netback offshore operations
  • $200 million per year of near-term, realizable synergies
  • Opportunity to participate in Husky's current 2.2 percent dividend yield
  • Retain significant upside through participation in a stronger combined platform for shareholder value creation

We have determined the best way to realize the substantial benefits of this transaction is to take our Offer directly to you, to allow you to decide the future of your investment.