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(Updates with investor’s claims starting in second paragraph.)
Aug. 31 (Bloomberg) -- A Venoco Inc. investor sued to block a bid by the company’s founder to take the oil and gas producer private.
Chairman and Chief Executive Officer Timothy Marquez’s $770.2 million offer is unfair to shareholders and undervalues the company, shareholder James G. Prince said today in a complaint in Delaware Chancery Court. Prince asked that the case be a class-action suit including other Venoco shareholders.
“Marquez strategically timed the proposed transaction during a period of economic turmoil in which the terms of the proposed transaction could be superficially viewed in a positive light,” lawyers for Prince wrote.
Marquez, who holds 50.3 percent of the Denver-based oil and gas company’s shares, offered this week to buy the rest for $12.50 each.
Phil McPherson, a Newport Beach, California-based analyst with Global Hunter Securities LLC, said Aug. 29 that the offer represents a significant discount to the value of the company’s assets and may prompt investor lawsuits and a potentially higher bid from another oil producer.
Venoco, founded in 1992, is the second-largest landholder in California’s Monterey oil-shale formation.
Mike Edwards, a spokesman for Venoco, didn’t immediately return a phone call seeking comment on the complaint.
Venoco fell 17 cents, or 1.4 percent, to $11.59 at 3:14 p.m. in New York Stock Exchange composite trading. The shares have fallen 35 percent in the past year.
The case is Prince v. Venoco Inc., CA6823, Delaware Chancery Court (Wilmington).
--With assistance from Bradley Olson in Houston. Editors: Charles Carter, Andrew Dunn
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