Watch List: VQ

[dan_s]

IMO we may see more M&A and "Go Private" transactions in the coming months if share prices do not move higher soon. Most of the E&P companies we are tracking now trade below their break-up value. Look for the majors and large-cap E&Ps, who have strong balance sheets, to start buying proven reserves on Wall Street. - Dan

DENVER (AP) -- Venoco Inc. said Monday that its board received a proposal from its chairman and chief executive to acquire the oil and gas company and take it private.

Venoco said that a special committee of independent directors will consider the $12.50 a share buyout proposal.

The offer represents a 39 percent premium over the company's Friday closing share price of $8.98. The news sent Venoco shares up $2.72, or 30 percent, to $11.70 in premarket trading.

Timothy Marquez, who already holds 50.3 percent of Venoco's outstanding common stock, offered to buy the rest of the company's outstanding shares for $12.50 per share in cash, the company said.

With about 58.7 million shares outstanding, the offer would value the entire company at almost $734 million.

In his letter to the board, Marquez said that if his offer were to be accepted, he expects that the company's senior management would remain in place. He added that he's confident he would be able to obtain the needed financing.

The committee that will consider the offer is comprised of all of the company's directors except Marquez. The committee will retain independent financial advisors and legal counsel to assist it, Venoco said.

[dan_s]

The offer is a significant discount to the value of the company’s assets and may prompt shareholder lawsuits since the stock was trading as high as $22.46 in February, Phil McPherson, a Newport Beach, California-based analyst with Global Hunter Securities LLC, said today in an interview. Another oil producer may emerge to make a higher bid or Marquez may have to raise his offer, McPherson said.

Other bidders may include Occidental Petroleum Corp. (OXY), Hess Corp. (HES), Chesapeake Energy Corp. (CHK) or Plains Exploration & Production Co. (PXP), he said. McPherson owns Venoco shares and rates the company a “buy.”