EPL Rejects ATS' Unsolicited Offer as Inadequate and Not in Best Interests of EPL Stockholders
14 Settembre 2006 - 10:16PM
Business Wire
Energy Partners, Ltd. ("EPL" or "the Company") (NYSE:EPL), today
announced that its Board of Directors has rejected as inadequate
the unsolicited conditional offer to acquire EPL for $23.00 per
share in cash ("the Offer") made by ATS Inc. ("ATS"), a
wholly-owned subsidiary of Woodside Petroleum, Ltd., and recommends
that its stockholders not tender their shares into the Offer. The
EPL Board reached its recommendation after a review of the Offer
with its independent financial and legal advisors. That review
included the opinions of Petrie Parkman & Co, Inc., Evercore
Group L.L.C., and Banc of America Securities LLC that, as of
September 13, 2006, the $23.00 per share being offered by ATS is
inadequate, from a financial point of view, to EPL stockholders
other than Woodside and its affiliates. The Board believes that the
Company, both on a stand-alone basis and on a combined basis with
Stone Energy Corporation (NYSE: SGY) ("Stone"), should provide
greater value to stockholders than the Offer. As previously
disclosed, the Company 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." The Company filed this action on September
7, 2006 in the Court of Chancery for New Castle County, Delaware,
and the Court has expedited the litigation and set a trial on the
Company's claims on September 22, 2006. Richard A. Bachmann, EPL's
Chairman and Chief Executive Officer, said, "Our Board is always
looking to maximize stockholder value and believes that the Offer
is opportunistic and significantly undervalues EPL. 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." In making its determination
to reject the Offer, EPL's Board considered a number of factors,
including: -- The Board's belief - based on its familiarity with
the business of the Company, its financial condition, results of
operations and prospects, and the Board's familiarity with the oil
and natural gas exploration and production industry, and the
prospects for, and the Company's position in, that industry - that
the Company, both on a stand-alone basis and on a combined basis
with Stone, should provide greater value to stockholders than the
Offer. -- The Board's belief that the fair value and unaffected
price of the Company's stock is substantially higher than the
prevailing market price at the time ATS launched the Offer. The
Board noted that the $23.00 per share offer price is a 29% discount
to the Company's 52-week high (which was $32.27 on September 29,
2005), and a 7% discount to the Company's average closing stock
price over the 90 trading days preceding the announcement of the
Company's offer to acquire Stone. -- The opinions of Petrie Parkman
& Co., Inc., Evercore Group L.L.C., and Banc of America
Securities LLC, the Company's financial advisors, to the effect
that, as of September 13, 2006, and based upon and subject to
various assumptions and limitations set forth in each opinion, the
$23.00 per share being offered was inadequate, from a financial
point of view, to the Company's stockholders (other than Woodside
and its affiliates). -- The Board's belief that the Company's
prospect inventory, including those prospects on the Gulf of Mexico
Shelf and in the deepwater Gulf of Mexico, is expected to generate
increasing returns over the next few years, and that neither the
Company's current stock price nor the Offer reflects the value of
these assets or their potential. -- The Board's belief that the
Offer represents an opportunistic attempt by Woodside to acquire a
unique and valuable collection of oil and natural gas exploration
and production assets and employees at a favorable time to Woodside
at a price well below the true value that these assets and
employees represent. -- The conditionality of the Offer, which
includes many stringent, open-ended or subjective conditions that,
unless waived by ATS, may result in the Offer not being
consummated. -- The fact that there is nothing to prevent ATS or
any other party from making a proposal to acquire the combined
company that would result from the merger of the Company and Stone,
and thus nothing to prevent the shareholders of the Company from
receiving a control premium for their shares in the future In order
to allow the Company sufficient time to act in the best interests
of EPL stockholders, the Board has adopted a stockholder rights
plan with a term of six months. Further details regarding today's
announcements, including a description of the Rights Plan and other
actions taken by the Board, are outlined in the Company's Schedule
14D-9, which is being filed today with the Securities and Exchange
Commission and which will be mailed shortly to all EPL
stockholders. Petrie Parkman & Co., Inc., Evercore Group
L.L.C., and Banc of America Securities LLC are acting as financial
advisors to EPL. Cahill Gordon & Reindel LLP, Wachtell, Lipton,
Rosen & Katz and Abrams & Laster, LLP are acting as legal
counsel to EPL. About Energy Partners, Ltd. Founded in 1998, EPL is
an independent oil and natural gas exploration and production
company based in New Orleans, Louisiana. The Company's operations
are focused along the U. S. Gulf Coast, both onshore in south
Louisiana and offshore in the Gulf of Mexico. Forward-Looking
Statements & Additional Information This press release contains
forward-looking information regarding EPL. All statements included
in this press release that address activities, events or
developments that EPL expects, believes or anticipates will or may
occur in the future are forward-looking statements. These include
statements that are discussed in EPL's filings with the Securities
and Exchange Commission (SEC). These statements are based on
current expectations and projections about future events and
involve known and unknown risks, uncertainties, and other factors
that may cause actual results and performance to be materially
different from any future results or performance expressed or
implied by these forward-looking statements. Please refer to EPL's
filings with the SEC, including its Form 10-K for the year ended
December 31, 2005 and Form 10-Q for the quarter ended June 30,
2006, for a discussion of these risks. EPL AND STONE HAVE FILED A
JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS WITH THE
SECURITIES AND EXCHANGE COMMISSION. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ CAREFULLY THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION REGARDING EPL, STONE AND THE
ACQUISITION. A DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS WILL BE
SENT TO SECURITY HOLDERS OF EPL AND STONE SEEKING THEIR APPROVAL OF
THE ACQUISITION. The documents filed with the SEC by EPL may be
obtained free of charge from EPL's website at www.eplweb.com or by
directing a request to: Energy Partners, Ltd., 201 St. Charles
Avenue, Suite 3400, New Orleans, Louisiana 70170, Attn: Secretary,
(504) 569-1875. In addition, the documents filed with the SEC by
Stone may be obtained free of charge from Stone's website at
www.stoneenergy.com or by directing a request to: Stone Energy
Corporation, 625 E. Kaliste Saloom Road, Lafayette, Louisiana
70508, Attn: Kenneth Beer, (337) 237-0410. Investors and security
holders are urged to read the joint proxy statement/prospectus and
the other relevant materials when they become available before
making any voting or investment decision with respect to the
proposed acquisition. EPL, Stone and their respective executive
officers and directors may be deemed to be participants in the
solicitation of proxies from the stockholders of EPL and Stone in
favor of the acquisition. Information about the executive officers
and directors of EPL and their direct or indirect interests, by
security holdings or otherwise, in the acquisition will be set
forth in the proxy statement-prospectus relating to the acquisition
when it becomes available. Information about the executive officers
and directors of Stone and their direct or indirect interests, by
security holdings or otherwise, in the acquisition will be set
forth in the proxy statement-prospectus relating to the acquisition
when it becomes available.
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