Strathcona rises on plan to launch $4.25 billion hostile bid for MEG Energy

Shares of Canadian oil and gas producer Strathcona SCR.TO rise ~14% to C$30.92

Company plans to launch a C$5.93 billion ($4.25 billion) hostile takeover bid for rival MEG Energy MEG.TO

MEG shares down 1.7% at C$21.30

SCR says it first made an offer to MEG's board on April 28, but was turned down on May 13

On Friday, MEG said its board will review the offer and urged shareholders to take no action for now

SCR is offering 0.62 of its share and C$4.10 in cash for each MEG share, valuing the bid at C$23.27/share — a 9.3% premium to MEG's last closing price

If the deal goes through, MEG shareholders would own 37.8% of the combined company

Desjardins analysts say the offer is highly unlikely to be accepted, adding that the "modest" premium would likely attract competing offers

Including session's moves, shares of SCR down 6.7% ad MEG up 10.5% YTD