Woodside tries to spike $69M poison pill tied to Lafayette-based EPL

New Orleans CityBusiness, Sep 14, 2006 by Matthew Penix

A Delaware judge Thursday fast-tracked a lawsuit challenging a proposed $1.4-billion buyout by Energy Partners Ltd. of Stone Energy Corp. of Lafayette.

The lawsuit was brought by Covington-based ATS Inc., a subsidiary of Australia's Woodside Petroleum Ltd., which began an $833-million hostile takeover of EPL in late August. The ATS complaint seeks to invalidate termination fees of the EPL and Stone merger. which could tally $69.1 million if Woodside's unsolicited takeover of EPL kills the merger with Stone Energy as well as Stone's merger with Plains Exploration & Production Co. Woodside has offered $23 for each outstanding share of EPL, and it already owns roughly 1.7 million shares, or about 4.5 percent of EPL stock. The tender offer, which expires Sept. 28, is contingent upon EPL scuttling its acquisition of Stone Energy.

Delaware's Court of Chancery Vice Chancellor Donald F. Parsons approved motions to expedite the Woodside suit. Woodside is challenging an EPL bylaw requiring 85 percent of company shareholders to approve the removal and appointment of EPL board members. Woodside said only a majority of EPL shareholders must approve such a move. Woodside wants to replace the EPL board with its own nominees, said spokesman Troy Haden.

EPL shareholders filed a countersuit claiming a "no talk" clause illegally ties its hands. Stone says EPL can talk with anyone as long as the merger follows through as planned.

The speedy trial ruling means EPL will discover its risk more quickly if it talks openly with Woodside or looks at options, which could be implemented unilaterally by Energy Partners.

Spokesperson Al Petrie said EPL would likely announce some terms of the proposed takeover deal today. However, Woodside spokesman Roger Martin said he doesn't expect resolutions in the takeover until the offer expires Sept. 28.

Woodside, based in Perth, Australia, has been involved in U.S. exploration activities since 1999. The company has 3,400 employees, exploration interests in 11 countries and petroleum production in four.

In another attempt to boost its presence in the Gulf of Mexico, Woodside acquired Houston-based Gryphon Exploration last year. Woodside is the operator and one-sixth owner of the North West Shelf Venture, Australia's largest natural resources project that includes oil and natural gas, liquefied natural gas and liquid petroleum gas.

EPL was founded in 1998 by CEO Richard Bachmann. It is focused primarily on exploration and the acquisitions of mature petroleum fields in the Gulf.