Having substantial holdings in Monterey Shale in California, Independent energy company, Venoco Inc., has entered into a definitive merger agreement. Under the agreement, Venoco chairman and CEO Timothy M. Marquez, who holds 50.3% of the Venoco’s common stock, will acquire the company through wholly owned entity, Denver Parent Corporation. The Venoco shareholders will receive USD12.50 per share upon completion of the transaction, excluding Marquez and affiliated entities. A total enterprise value of approximately USD1.5 billion is estimated, with the price based on a premium of 63% of Venoco’s closing price on the final trading day before the announcement of the agreement on 3 January 2012 and a premium of 75% to the volume-weighted one-month moving average for that date.
Following the investigation of alternatives and based on the unanimous recommendation of the special committee of the board of directors, with the assistance of independent financial and legal advisors, it was decided that the transaction with Marquez would maximize value of Venoco’s minority public shareholders and the agreement was approved.
Certain closing conditions such as receiving approval from shareholders, regulatory approvals, financing conditions and other customary conditions will apply before the completion of the transaction. In a non-waivable condition, a majority of outstanding shares not owned by Marquez, his affiliates or by any officer, director or Venoco employee, must vote in favor of the merger agreement.
Venoco currently has 312,000 gross and 214,000 net acres of Monterey Shale acreage and operates three offshore platforms in the Santa Barbara channel, non-operated interests in three other platforms, has extensive operations in the Sacramento Basin and operates three onshore properties in Southern California.