To discourage a hostile takeover, Houston Exploration Co.’s board of directors on Thursday adopted a shareholder rights plan that may be exercised if any group — with the exception of 24% shareholder KeySpan Corp. — acquires or announces a tender offer for 10% or more of the company’s outstanding common stock.

The “poison pill” plan was not in response to any specific effort to acquire the independent producer, it said in a statement. Rather, it is designed to “assure that all stockholders of the company receive fair and equal treatment in the event of any proposed takeover of the company and to guard against two-tier or partial tender offers, open market accumulations and other tactics designed to gain control of the company without paying all stockholders a fair price.”

CEO William G. Hargett said the plan was adopted “in light of recent acquisition activity in our sector, continuing volatility in commodity prices, and the prospect of KeySpan divesting their remaining interest in our company. Given the cyclical nature of our sector these plans are very common and have been adopted by virtually all of our peers, allowing the board of directors to ensure equal and fair treatment of all stockholders in an acquisition context.”

In May, KeySpan successfully completed a $449 million exchange transaction with Houston Exploration that reduced its ownership from 55% to 24% (see Daily GPI, May 26). Under the terms of the transaction, KeySpan exchanged 10.8 million shares of Houston Exploration common stock for all the stock of Seneca-Upshur Petroleum Inc., a wholly owned subsidiary of Houston Exploration. Houston Exploration retired 4.6 million shares and issued 6.2 million shares in a public offering.

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