Fund management giant Fidelity Investments is threatening to vote against Cenovus Energy Inc.’s CVE-T friendly takeover of MEG Energy Corp. MEG-T, according to three sources, putting the $8.6-billion marriage at risk.

At least one portfolio manager at Boston-based Fidelity, which owns 9.5 per cent of MEG, has told the two energy companies they planned to vote against the transaction, according to sources familiar with the situation. The Globe and Mail is not naming the sources because they are not authorized to comment on the deal.

Fidelity, Cenovus and MEG declined to comment.

Fund managers have been pushing Cenovus to sweeten its offer for MEG since the companies announced their planned union in August. MEG’s board of directors went looking for a white knight buyer – a friendly buyer – after Strathcona Resources Ltd. launched a hostile bid for the company in May.

Strathcona is MEG’s largest shareholder, with a 14-per-cent stake, and has consistently said it plans to vote against the Cenovus takeover. Fidelity is the second-largest shareholder, according to regulatory filings.

MEG Energy delays shareholder vote on Cenovus takeover offer

On Tuesday, analyst Kevin Fisk at Bank of Nova Scotia said: “In our view, there is a risk that the transaction will not be approved.”

Fidelity routinely plays a critical but discreet role in Canadian boardroom dramas. In 2017, the fund manager blocked Couche-Tard’s attempt to extend its co-founders’ control of the convenience store chain by preserving a dual-class share structure, to the frustration of executive chair Alain Bouchard.

Fidelity is one of the world’s largest money managers, with US$16.4-trillion of client assets under administration. In Canada, the company oversees $338-billion in client assets and is one of the largest shareholders in numerous public companies.

Portfolio managers at Fidelity have the authority to vote shares in their funds as they see fit in takeovers, in consultation with the company’s compliance and legal departments.

On Tuesday, MEG announced it would delay a shareholder vote on Cenovus’s bid for a second time, moving the meeting from Oct. 22 to Oct. 30.

Cenovus needs 66.6 per cent of MEG shareholders to approve its cash-and-share offer. On Tuesday, the two companies said 63 per cent of MEG shareholders support the Cenovus offer.

After meeting MEG’s institutional shareholders in New York in late September, Cenovus bumped its price by $1.32 per MEG share and doubled the amount of stock in the bid to 50 per cent of the purchase price.

At the time, Cenovus chief executive officer Jon McKenzie said, “Many MEG shareholders indicated that they would prefer to receive greater Cenovus share consideration, so that they can more fully participate in the upside of the combined company.”

Cenovus also said the improved bid represented its “best and final offer for MEG,” a line that typically means the buyer will walk away if shareholders turn it down.

In return for boosting the offer, MEG’s board allowed Cenovus to buy up to 9.9 per cent of the company in the open market. Cenovus acquired a 9.8-per-cent stake in MEG last week and can vote on these shares for its offer.

Strathcona dropped its bid for MEG after the company’s board let Cenovus acquire shares. Strathcona said MEG’s decision to extend the date of the shareholder vote and allow the share purchases made its attempt to buy the company “impractical.”

Cenovus has paths to successfully completing the takeover, if it is willing to be patient, according to lawyers who work on mergers and acquisitions. One option for the buyer would be to change the structure of the offer and lower the required approval from two-thirds of votes to 50 per cent plus one vote, a shift that would take several months to carry out.

In August, Cenovus said it expected to close the takeover by the end of the year.

MEG owns oil sands properties in the Christina Lake region, south of Fort McMurray, Alta., and Cenovus has operations in the same area.