SYDNEY Aug 28, 2006 (Dow Jones Newswires)
Woodside Petroleum Ltd. (WPL.AU) said it has launched a US$23 a share cash takeover bid for Energy Partners Ltd. (EPL).
Woodside, the operator of Australia's multibillion dollar North West Shelf liquefied natural gas project, said the offer made through its ATS Inc. unit is conditional on Energy Partners' shareholders voting down the pending merger with Stone Energy Corp. (SGY).
It said it will increase its bid to US$24 a share subject to two termination fees linked to the Stone Energy merger being scrapped. If either fee is terminated Woodside will boost the offer price to US$23.50 a share, with the termination of both increasing the offer to US$24 a share.
The Australian company said its ATS unit has a stake of about 4.5% or 1.719 million shares in Energy Partners acquired in the open market in recent weeks.
"The acquisition of EPL would continue Woodside's growth in the Gulf of Mexico, immediately increasing the company's production and reserves," Woodside said in a statement.
"We are building a significant presence in the Gulf and the acquisition of EPL would be a valuable addition to what is already an important business for us," said Woodside chief executive Don Voelte.
At the end of 2005, New Orleans-based Energy Partners had proved reserves of 59.3 million barrels of oil equivalent consisting of 53.1% oil and 46.9% gas.
Woodside said its US$23 a share offer is a 25% premium to Energy Partners' Friday closing price of US$18.40. A Woodside spokesman said the US$23 a share bid values Energy Partners at a total of US$1.18 billion, which includes US$257 million of debt and a US$38 million working capital deficit. Energy Partners has 38.4 million shares on issue.
Woodside said it is filing litigation in the Delaware Court of Chancery "seeking among other things, to invalidate certain provisions of the merger agreement between SGY and EPL relating to two termination fees".
It said one fee has already been advanced from Energy Partners and relates to Stone Energy's previously announced merger with Plains Exploration and Production Company. The second fee would be payable from Energy Partners to Stone Energy "in the event of a termination of their current merger agreement under certain circumstances".
The Woodside spokesman said one of the "break fees" is valued at US$43 million and the other is valued at US$25 million.
Woodside, which is about 34% owned by Royal Dutch Shell Plc. (RDSB.LN), said its bid follows last year's acquisition of Houston-based Gryphon Exploration Company.
Copyright (c) 2006 Dow Jones & Company, Inc.
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