Woodside subsidiary bids for Energy Partners

Sept. 5, 2006
Woodside Petroleum Ltd.'s wholly-owned subsidiary, ATS Inc., began its $880 million tender offer in a takeover bid for Energy Partners Ltd. (EPL) of New Orleans, which planned to merge with Stone Energy Corp., Lafayette, La.

By OGJ editors
HOUSTON, Sept. 5 -- Woodside Petroleum Ltd.'s wholly-owned subsidiary, ATS Inc., began its $880 million tender offer in a takeover bid for Energy Partners Ltd. (EPL) of New Orleans, which planned to merge with Stone Energy Corp., Lafayette, La.

The offer from ATS, Covington, La., is conditional upon EPL shareholders voting down a pending merger with Stone. EPL proposed to buy Stone for $1.43 billion in a cash-stock offer, plus $563 million in debt for a total transaction value of $2 billion (OGJ, June 12, 2006, p. 34).

EPL said it is reviewing Woodside's proposal. ATS already has a 4.5% stake in EPL, acquired on the open market. On Aug. 31, ATS opened a $23/share unsolicited offer.
The value of the offer could rise pending the outcome of a lawsuit Woodside filed in Delaware.

If a court invalidates either of two termination fees regarding the EPL-Stone transaction, Woodside said its offer would rise to $23.50/share. If both fees were invalidated, Woodside said the offer would rise to $24/share.

An Australian company, Woodside wants to replace EPL's board. The lawsuit challenges an EPL bylaw requiring 85% of shareholders to approve changes in the board. Woodside argues that only a majority of shareholders have to approve a change.

Last year, Woodside Energy USA acquired Gulf of Mexico producer Gryphon Exploration Co. of Houston for $283 million plus assumption of $14 million in debt (OGJ, Sept. 12, 2005, p. 29).