If the preferred shares vote no, the merger cannot happen. Husky must be maintained as a separate company. That's what happened with Lowe's and Rona. There is an alternative- the merged company would have to guarentee the prefs the same way they would a bond. Thus, the prefs would essentially become debt. Look at the quote in the article regarding the Rona/Lowe's situation:
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But Lavalle, who bought the RONA prefs in the market at a healthy discount to their face value, was patient, knowing that an outstanding issue of pref shares would also require Lowe’s to file financial statements in Canada. Lavalle figured that was an unlikely prospect because such information would be helpful to competitors of Lowe’s. <NOTE IT IS UNLIKELY CENOVUS WILL WANT HUSKY AS A TOTALLY SEPARTE ENTITY AS WELL> And that obligation would disappear, he argued, if the obligations for the preferreds were assumed by the parent of Lowe’s Canada. In mid-July the U.S. arm of Lowe’s announced that it would “guarantee” RONA’s preferred share obligations as well as its outstanding debentures (that were set to mature in October 2016.)...
And Lavalle told Lowe’s that $25 was his number though it was possible – if interest rates kept falling, with a guarantee from Lowe’s, which can finance itself in the low 2 per cent range – the prefs could trade above $25. “The pref was like a bond,” he said."