(Reuters) -Canadian oil and gas producer Strathcona said late Thursday it plans to launch a C$5.93 billion ($4.25 billion) takeover bid for peer MEG Energy, aiming to create the country’s fifth-largest oil producer.

Strathcona will offer to buy all of the issued and outstanding common shares of MEG Energy for 0.62 of a common share of Strathcona and C$4.10 in cash per MEG Share.

The offer represents a total consideration of C$23.27 per MEG share, Strathcona said, which is a premium of 9.3% to MEG Energy's last closing price. A Reuters calculation shows that will value MEG at about C$5.93 billion.

After completion of the offer, Strathcona expects to have about $1.5 billion in net debt.

On April 28, the company made a formal proposal to MEG Energy's board of directors. But on May 13, 2025, the MEG Board said it was not interested in pursuing a combination with Strathcona.

($1 = 1.3944 Canadian dollars)

(Reporting by Ananya Palyekar in Bengaluru; Editing by Nivedita Bhattacharjee)