Warburg Pincus to sell $157 mln of MEG Energy shares in secondary deal

U.S. private equity firm Warburg Pincus has agreed to complete a secondary offering of shares in MEG Energy Corp (TSX:MEG), a Calgary-based company focused on sustainable in situ oil sands development and production in Western Canada. Under the terms of the agreement, Warburg Pincus will sell 5,000,000 common shares at a purchase price of $31.40 per share, realizing gross proceeds of $157 million. Upon closing of the transaction, Warburg Pincus will hold around 17% of all outstanding shares. Warburg Pincus and Canadian private equity firm KERN Partners invested in MEG prior to the company’s $700 million initial public offering in 2010. MEG’s other investors include the Caisse de dépôt et placement du Québec.


MEG Energy Announces Warburg Pincus $157 Million Secondary Offering

CALGARY, ALBERTA–(Marketwired – Nov. 25, 2013) –

MEG Energy Corp. (TSX:MEG) (the “Company”) today announced that one of its principal shareholders, WP Lexington Private Equity B.V. (“WP Lex”), an affiliate of Warburg Pincus LLC (“Warburg Pincus”), has entered into an agreement with BMO Capital Markets (“BMO”) to complete a secondary offering under which BMO has agreed to purchase 5,000,000 common shares of the Company (the “Common Shares”) held by WP Lex at a purchase price of $31.40 per Common Share. Pursuant to the agreement, the Company has agreed to file the required filings to facilitate the offering. Following the closing of the offering, affiliates of Warburg Pincus will continue to hold 37,769,285 common shares of the Company, representing approximately 17% of the outstanding shares. The Company will not receive any proceeds from the offering.

The offering will be an underwritten, bought deal public issue in all provinces and territories of Canada by way of a short form prospectus. This offering will also be extended to Qualified Institutional Buyers in the United States, pursuant to the registration exemptions provided by Rule 144A of the Securities Act of 1933 and internationally, as permitted. The offering is expected to close on or about December 13, 2013.

Notice to Readers

The preliminary short form prospectus for the offering, which contains important information relating to the Company and the offering, will be filed by November 29, 2013 and may be obtained on the SEDAR website at www.sedar.com under the Company’s profile. The preliminary prospectus will be subject to completion or amendment. There will not be any sale or acceptance of an offer to buy the Common Shares sold pursuant to the offering until a receipt for the final prospectus has been issued.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act of 1933 and other applicable securities laws.

Forward-Looking Information

This news release contains forward-looking information including but not limited to the completion of the offering and the anticipated closing date of the offering. Such forward-looking information is based on certain assumptions and analysis made by the Company in light of its experience and perception of current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to market conditions and a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company’s expectations. Other factors which could materially affect such forward-looking information are described in the risk factors detailed in the continuous disclosure documents filed by the Company on SEDAR at www.sedar.com and will be further described in the preliminary prospectus prepared in connection with the offering.

MEG Energy Corp. is focused on sustainable in situ oil sands development and production in the southern Athabasca oil sands region of Alberta, Canada. MEG is actively developing enhanced oil recovery projects that utilize SAGD extraction methods. MEG’s common shares are listed on the Toronto Stock Exchange under the symbol “MEG.”

Please direct all investor and media inquiries to:

MEG Energy Corp.

John Rogers, Vice President,

Investor Relations and External Communications


Photo courtesy of Shutterstock.