New Orleans-based Energy Partners Ltd. announced Monday that it has concluded a process during which it solicited bids to buy the company, but it did not receive a definitive offer.
As a result, the independent oil and natural gas producer said it will continue to execute its strategic plan, augmented by a self-tender offer and the divestment of certain assets. It plans to repurchase up to 8.7 million of its outstanding common shares for approximately $200 million at $23 per share, which is expected to begin within about 10 business days. Assuming the offer is fully subscribed, Energy Partners would repurchase approximately 22% of its currently outstanding common shares.
Energy Partners' repurchase offer matches the $23/share offer made by Australian-based Woodside Petroleum Ltd. last year for Energy Partners, which the company spurned (see Daily GPI, Oct. 27, 2006). The total bid was approximately $880 million. The Woodside offer caused Energy Partners to withdraw its $2.2 billion proposal to buy producer Stone Energy Corp. last October (see Daily GPI, Oct. 16, 2006).
In addition to the self-tender offer, Energy Partners said it plans to sell off certain assets for an estimated $125 million to reduce debt following the completion of the offer. It also noted that its board of directors has authorized additional open-market purchases of its common shares up to an amount of $50 million during a one-year period following the conclusion of the $200 million self-tender offer.
Energy Partners Chairman Richard A. Bachmann said the producer approached 63 potential bidders for the company, including 25 domestic oil and gas companies, 23 international oil and gas companies and 15 financial sponsors. Of those companies, he noted that 14 expressed interest and executed a confidentiality agreement with Energy Partners, but no definitive offers resulted.
"After carefully reviewing other strategic alternatives, our board believes that the best option for shareholders is to continue to pursue our current plan, augmented by a repurchase of shares," he said. "The execution of the self-tender offer and the ability for us to repurchase shares on the open market will return value to our shareholders, while our divestitures are expected to provide significant cash to help finance the stock repurchases."
Energy Partners' operations are focused along the Gulf Coast, both onshore in South Louisiana and offshore in the Gulf of Mexico.
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