New Orleans-based Energy Partners Ltd. (EPL) Thursday rejected an $883 million unsolicited bid from Woodside Petroleum Ltd. subsidiary ATS Inc. Energy Partners said the $23/share cash offer was inadequate and opportunistic. The company recommended shareholders not tender their shares.

The Woodside/ATS offer was announced late last month (see Daily GPI, Sept. 1). The offer was made contingent upon EPL not completing its pending $1.4 billion merger with Stone Energy Corp. (see Daily GPI, Aug. 29).

The EPL Board reached its recommendation to reject the offer after a review with its financial and legal advisors. That review included the opinions of Petrie Parkman & Co Inc., Evercore Group LLC, and Banc of America Securities LLC that, as of Sept. 13, the $23/share being offered by Woodside’s ATS is inadequate. The board believes that EPL, both on a stand-alone basis and on a combined basis with Stone Energy Corp., should provide greater value to stockholders than the Woodside.

As previously disclosed, EPL has filed an action for a declaratory judgment to eliminate any doubt as to its right under the Stone merger agreement to engage in “developing, soliciting, considering, communicating, exchanging information, negotiating, disclosing, entering into or consummating potential or definitive strategic alternatives for Energy Partners, including internally generated or third party proposals.”

“Our Board is always looking to maximize stockholder value and believes that the [Woodside] offer is opportunistic and significantly undervalues EPL,” said EPL CEO Richard Bachmann. “Given our solid track record of operational success and the strong potential of our attractive Gulf of Mexico assets, we believe that ATS’ offer is clearly not in the best interests of EPL stockholders and therefore urge them not to tender their shares.”

EPL said it considered:

Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, LA. The Company’s operations are focused along the U. S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico.

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