An EPL Oil & Gas Inc. investor sued to block Energy XXI (Bermuda) Ltd.’s proposed $1.5 billion acquisition, saying the price is too low and the company should seek a better offer.
Energy XXI announced March 12 that it would acquire EPL for $39 a share in cash and stock to become the largest publicly traded independent producer on the Gulf of Mexico shelf. The offer represents a 34 percent premium over EPL’s March 11 closing price.
EPL’s directors failed to maximize shareholder value, the investor, Antonio Lopez, said in a lawsuit made public today in Delaware Chancery Court in Wilmington. The terms of the proposed transaction “substantially favor” Energy XXI and will “unreasonably” dissuade potential suitors, according to Lopez.
EPL shareholders won’t receive fair value for their shares, Lopez said in his complaint. He’s seeking a court order barring the deal and awarding unspecified damages.
Mac Jensen, a spokesman for Houston-based EPL, didn’t immediately return a phone call and e-mail seeking comment on the complaint.
The case is Lopez v. EPL Oil & Gas Inc., CA9460, Delaware Chancery Court (Wilmington)