EXCO Resources (NYSE:XCO), a US focused oil and gas exploration and production company, confirmed this morning that had received an all-cash offer from its Chairman and CEO Douglas Miller. Miller is offering US$20.50 per share for all the stock in the company he does not already own. Shares in the company closed at US$14.83 on Friday.
“The Board of Directors of the Company intends to establish a Special Committee of the Board comprised of independent directors to consider, among other things, the proposal.”
Exco also released a letter it received from Miller, where he noted that Ares Management, Oaktree Capital Management and Boone Pickens “each expressed an interest in pursuing the acquisition with me”.
The offer price represents a 38% premium to the closing price on Friday. Miller is proposing to merge EXCO Resources with a newly formed acquisition vehicle.
“I would continue as Chairman and Chief Executive Officer following the transaction and expect that the Company's senior management team would remain in place,” Miller further stated.
He also confirmed that he would reinvest a “significant portion” of his own equity in the transaction, and would also use outside investment and third party debt financing to complete the proposed merger.
“My familiarity with the Company means that I will be in a position to proceed very quickly with this transaction. I expect that you will establish a special committee of independent directors to consider this proposal on behalf of the Company's public shareholders with guidance from its own legal and financial advisors. I welcome the opportunity to present this proposal to the special committee as soon as possible.”
EXCO Resources itself has been very active in the M&A scent of late. The Company acquired Common Resources for US$442 million and Southwestern Energy Company for US$356 million in the second quarter. The company also announced a joint venture (JV) with BG Group (LSE:BG) over its ground in the Appalachians.
Disclosure: no position