Venoco CEO Tim Marquez has agreed to pay $12.50 per share to take his Denver and Carpinteria-based oil and gas company private.
In a deal announced shortly before the markets opened on Jan. 17, Venoco said the company had agreed to accept an offer that Marquez, who already owns 50.3 percent of the company, made last summer. The price was unchanged after a special committee formed by the board of directors found the offer “in the best interests” of minority shareholders. Marquez is chairman of the board but abstained from voting on the deal.
Shares shot up 40 percent to $10.80 by midday Jan. 17. The merger agreement requires the deal to gain approval from a majority of the non-Marquez shareholders, some of whom have filed a lawsuit. The lawsuit alleges that the $12.50-a-share price was derived from a slump in the market and values the entire company at less than the value of its assets, which include Platform Holly off the Goleta Coast.
Though headquartered in Denver, Venoco’s largest group of employees operates from offices in Carpinteria. Venoco is considered the second-largest holder of leases in the potentially lucrative Monterey shale formation, after Occidential Petroleum.
According to published reports, the all-cash bid represented a premium of 63 percent to the Jan. 13 close. A Business Times analysis from last summer suggested the bid values the entire company at $770 million.
According to reports, Bank of America Corp.’s Merrill Lynch and Strategic Energy Advisors LLC advised to the board’s special committee. Regulators must approve the sale as well as shareholders.
On Jan. 17, Venoco announced that Marquez would step down as CEO and be replaced by current Chief Operating Officer Ed O’Donnell. Marquez will step down in the third quarter of this year and continue to serve as executive chairman of the board, where he will focus on growth and acquisitions strategy, the company said.
O’Donnell has worked for Venoco since 1997 and worked for Unocal for more than 20 years before that.