Husky, MEG’s bigger rival, made a formal offer earlier this month to buy each MEG share for C$11 in cash or 0.485 of a Husky share, days after making an unsolicited C$6.4 billion ($5 billion) buyout proposal.
“The board ... has unanimously determined that the Husky offer significantly undervalues the common shares and is not in the best interests of MEG or MEG shareholders,” MEG said in a statement.
MEG also said it was exploring other transactions, and that “several strategic parties” had expressed interest in participating in a process to get more information about its business.
Husky’s offer comes at a time when Canadian oil producers have struggled with transportation bottlenecks as output has surged, pushing Canadian heavy crude prices to near-historic discounts to U.S. light crude.
Husky Chief Executive Officer Rob Peabody had said the bid for MEG reflects the need for Canadian oil companies to own integrated assets to manage the deep price discounts on Canadian crude.
Reporting by Debroop Roy in Bengaluru; Editing by Sai Sachin Ravikumar