JANA Urges Houston Exploration to Begin Acquisition Talks
JANA Partners LLC on Thursday called on The Houston Exploration Co. board to move forward on JANA's offer to purchase the latter for $62 per share in cash.
In a letter to the board, JANA offered to enter into a standstill and confidentiality agreement with the Company in exchange for being allowed to begin immediate due diligence, which JANA noted could cause it to arrive at an even higher offer price than $62 per share.
Since making its offer on June 12, JANA has increased its ownership position in Houston Exploration and is currently its largest shareholder, with approximately 12.8% of the company's outstanding shares. JANA Managing Partner Barry Rosenstein noted in that during this time the board had yet to make any inquiries or attempts to begin discussions regarding JANA's offer.
"While this communications barrier has given us no choice but to address the Board publicly, our preference is to acquire the Company on a negotiated basis through direct discussions with the Board," Rosenstein stated. "To that end, we hereby inform you that we are willing to enter into a customary standstill and confidentiality agreement in exchange for the opportunity to begin immediate due diligence on the Company. We believe this diligence could be completed promptly and may of course lead us to an even higher offer price than $62 per share."
A proposed standstill and confidentiality agreement was provided by JANA to the board together with the letter.
On June 12, following what it said were repeated attempts to engage the board in substantive discussions regarding the maximization of shareholder value, JANA offered to purchase Houston Exploration for $62 per share. While subject to customary diligence and documentation, JANA's offer is not subject to any financing condition. JANA, a Delaware limited liability company, holds Houston Exploration's common stock in various accounts under its management and control.
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