MEG IPO Slashed as Cnooc-Backed Oil-Sands Developer Seeks Expansion Money
The initial public offering of shares by MEG Energy Corp., a Canadian oil-sands developer partly owned by China’s Cnooc Ltd., was reduced by as much as 37 percent, according to two people familiar with the matter.
MEG is now planning sell 20 million shares for between C$35 and C$39 each, down from 23 million shares for C$42 to C$48, according to the people, who declined to be identified because the information isn’t public. Reuters reported the cut earlier.
MEG, based in Calgary, is using the IPO to finance the expansion of its Christina Lake project in Alberta. The prior offering price would have raised as much as C$1.1 billion ($1.06 billion), compared with the new minimum of C$700 million.
The sale, expected to be priced today, will be the second- largest IPO in Canada this year, after the C$1.35 billion offering by Athabasca Oil Sands Corp. in April. MEG Energy may trade on the Toronto Stock Exchange under the symbol MEG.
MEG Chief Financial Officer Dale Hohm declined comment until after the sale is priced.
Credit Suisse Securities Canada is leading a group of nine banks including BMO Nesbitt Burns, Barclays Capital Canada and Morgan Stanley Canada for the sale.