Husky is offering ~$3.21/share cash and ~0.344 Husky shares. Deal would look good for MEG shareholders in a sub ~US$60 WTI environment, and significantly reduce the risk profile, but would be dilutive in ~US$60+/bbl WTI environment. We anticipate HSE will raise the bid, but we do not expect a competing offer. Increasing TP from $11.00 to $12.00/share. Maintain BUY rating.