Enron Still May Sell EOG Interest
An April 2 filing with the Securities and Exchange Commission
suggests the rumored sale of Enron's controlling interest in Enron
Oil & Gas (EOG) could be in the offing. In the filing, Enron
said it is pondering EOG's potential sale among other possibilities
for the exploration and production arm of the energy giant.
Following the receipt of a proposal from a third party to
acquire EOG, a special committee was formed to determine the
proposal's fairness. "Enron has been informed that the Special
Committee's financial advisors have invited certain other third
parties to review confidential information about the Issuer and
have solicited indications of interest from those third parties
with respect to one or more possible alternative transactions to
the Proposal," the Enron filing says.
The filing says the committee has told Enron it is willing to
consider alternatives to the third party proposal but has said it
is not willing to recommend the proposal. "In light of the Special
Committee's response, Enron has been meeting with its legal and
financial advisors in order to determine whether the Proposal can
be modified in a way that, taking into account tax and other
structural matters, would be acceptable to Enron."
The company declined to comment further on the filing, which
also makes clear a transaction may not happen at all.
In December Enron made an SC13D filing with the SEC stating it
received an unsolicited offer for its 53.5% share of EOG, one of the
largest independent gas producers in the U.S. (see Daily GPI Dec. 17, 1998). According to the
solicitation, the unnamed third party would acquire Enron's shares in
EOG and make an offer for all the outstanding shares. The third party
also would require that Enron dispose of certain other assets.
Enron formed EOG in 1987 from its existing InterNorth and
Houston Natural Gas units. It maintained full ownership until 1989
when it spun off a portion to the public to raise $200 million. EOG
explores for and produces oil and gas in the United States, Canada,
Trinidad and India. About 69% of its reserves are in North America
while the rest are overseas.Enron formed EOG in 1987 from its
existing InterNorth and Houston Natural Gas Units. It maintained
full ownership until 1989 when it spun off a portion to the public
to raise $200 million. EOG explores for and produces oil and gas in
the United States, Canada, Trinidad and India. About 69% of its
reserves are in North America while the rest are overseas.
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