Husky Energy Inc. abandoned its $2.75 billion hostile takeover bid for rival Canadian oil-sands producer MEG Energy Corp. after failing to win enough support from shareholders.

Husky said in a statement it didn’t secure the backing of the required minimum number of investors by the time its that its cash-and-stock offer expired on Wednesday. The Calgary-based company previously stated the offer was subject to at least two-thirds of MEG’s shares being tendered.

Despite winning enough support to extend the deadline for its tender offer by 10 days, which required 50 per cent of the shares, Husky decided not to go ahead with the bid, according to people familiar with the matter, who asked not to be named because the details haven’t been made public.

MEG bonds plunged, as did its shares, which fell as much as 47 per cent in Toronto for their biggest decline ever. Husky rose as much as 15 per cent.

Husky cited “negative surprises” since it commenced its bid in October, including the government of Alberta’s mandated production cuts, which were implemented in order lift oil prices in the province, and a continued lack of progress on the development of new export pipeline capacity. Husky said it will proceed with the potential divestment of its retail business and Prince George refinery.

Husky argued that the deal would have created a larger company that’s better equipped to weather the pipeline bottlenecks that have weighed on Canadian oil producers. The combined company would have produced more than 410,000 barrels a day and had about the same refining capacity, protecting the enterprise against price shocks for oil-sands crude.

MEG consistently spurned Husky’s advances, saying that its own plans to expand production at its Christina Lake oil-sands operations will provide more value for shareholders. It also started a strategic review and opened a data room to allow potential rival bidders to assess its value.

MEG Chief Executive Officer Derek Evans said Thursday that the bid’s failure confirms that it didn’t recognize the company’s full value, adding that the company will update its 2019 business plan in the “near future.”

“We remain focused on executing our strategic vision to unlock value from our world class resource on behalf of our shareholders,” Evans said in a statement.

MEG’s bonds were by far the biggest losers in the high-yield market Thursday. Its 6.375 per cent notes due 2023 fell more than US16 cents to US84 cents on the dollar, according to Trace bond price data. The 7 per cent notes due 2024 also dropped to that level, the biggest plunge in almost three years.