Unwilling to raise its minimal bid of $23 a share for buy-recommended Energy Partners (NYSE:EPL), Australian natural gas producer Woodside (OTCPK:WOPEY) let both a tender offer and a proxy solicitation expire on Friday, November 17. After attracting attention with a bold move, Woodside appeared to lose confidence since all it had to do to be successful, as it appeared to us on the basis of public information, was to raise its bid enough for recent purchasers to show a modest profit.
Meanwhile, management of EPL recommitted to its process of exploring sale to a third party among other options. In a presentation to investors on November 17, management detailed the complete case for a valuation of its stock up to $50 a share (see graphic Potential Value Creation). Our estimate of net present value of $31 a share is an indication of how much prospective acquirers of EPL may be willing to pay after reviewing confidential information.