Oilsands giant Cenvous Energy Inc . is said to be preparing a bid for MEG Energy Corp. , setting up a potential challenge to Strathcona Resources ‘ hostile takeover offer, sources tell the Financial Post. The sources, who have knowledge of the bidding process, said MEG has set a Monday deadline for companies to submit bids to buy the oilsands producer, valued at $6.8 billion on the stock market as of Wednesday’s market close. Cenovus is believed to be seeking financing to support the bid, the sources said, but there is no guarantee it will proceed. Cenovus had previously downplayed speculation about a potential acquisition, and did not immediately respond to requests for comment Wednesday. MEG declined to comment. If Cenovus proceeds with a bid, it would represent a significant escalation in the battle for control of MEG, one of Canada’s largest pure-play oilsands producers, which kicked off in earnest last May with Strathcona’s announcement of a $6-billion cash-and-stock takeover offer. MEG has called Strathcona’s unsolicited bid “inadequate”, urging shareholders last June to reject the proposal and launching a strategic review of alternatives, including the invitation of potential rival bids for the company. Earlier this month, Strathcona said in a release that MEG’s board has refused to engage. Strathcona’s offer remains open until Sept. 15. An analyst at Royal Bank of Canada said in May that Cenovus would be “the most logical fit” to buy MEG, given that both companies have operations in the same oilsands region in northeastern Alberta, and could cut costs. Cenovus is still carrying debt from previous acquisitions and mergers — including the company’s $3.8-billion merger with Husky Energy in 2021 — though analysts have said previously that the company had made progress in deleveraging towards a total net debt target of $4 billion. The company’s net debt is estimated to be about $5.96 billion as of June 30, RBC Capital Markets wrote in a research note Tuesday previewing the company’s second-quarter earnings and balance sheet. MEG was also the target of a hostile takeover attempt by Husky in 2018. Meg Energy urges shareholders to reject takeover offer by Strathcona ResourcesStrathcona's hostile bid for MEG Energy called the 'largest investment in the Canadian oilpatch in a decade' • Email: mpotkins@postmedia.com Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.