Cenovus Energy (CVE.TO)(CVE) might be reluctant to sweeten its deal to buy smaller Canadian oilsands producer MEG Energy, (MEG.TO) following Monday’s upsized bid from Strathcona Resources (SCR.TO). That’s according to an institutional investor who owns all three stocks involved in the unfolding takeover drama.

Strathcona’s latest offer values MEG at $30.86 per share, above the $27.79 valuation of Cenovus’ cash-and-stock agreement presented in August. The new deal expires on Oct. 20. Strathcona previously offered $28.02 per share.

MEG said on Monday that its board of directors and a special committee will evaluate Strathcona’s new offer, and respond on or before Sept. 15. Meanwhile, its shareholders are due to vote on Cenovus’ offer at an Oct. 9 shareholder meeting, where two-thirds approval is required.

Cole Smead, portfolio manager and CEO of Smead Capital Management, says an offer over $30 per share is what MEG shareholders have been waiting for.

“We don’t see Cenovus chasing this over $30 [per share], as it would require a larger stock component, and would be viewed to be more dilutive,” he told Yahoo Finance Canada.

“The risk for Cenovus right now is they go to a proxy on Oct. 9, and they lose the vote. They’ve got to go over $30 even to be able to compete,” he added in a phone interview on Monday. “That’s a big move.”

MEG is widely seen as the last opportunity for large-scale expansion in Canada’s oilsands, an industry dominated by giants including Suncor Energy, Canadian Natural Resources, Imperial Oil, and Cenovus. A combination with Strathcona would create a new major producer, with output of more than 720,000 barrels per day.

Strathcona owns or controls a 14.2 per cent stake in MEG.

Smead estimates that 20 to 30 per cent of MEG shares are held by “arbitrageurs” looking to capitalize on an acquisition deal.

“If [Cenovus] goes to that vote without moving the terms, there’s a good risk that they lose the vote outright,” he said.

Yahoo Finance Canada has reached out to Cenovus for comment.

Toronto-listed MEG shares closed 0.34 per cent higher on Tuesday at $29.12.

Michael Spyker, principal analyst at oil and gas consultancy firm HTM Energy Partners, says the public bidding war for MEG is overshadowing the company’s value as an independent oilsands operator.

“Any transaction for MEG shareholders should be benchmarked OVER THE VALUE OF STAYING INDEPENDENT (which is a narrative that has disappeared, sadly),” he wrote in a lengthy post on the social media platform X on Monday.

Spyker says the $30 to $31 per share range is where a deal becomes compelling.