NEW ORLEANS -- Energy Partners Ltd. (EPL) and Stone Energy Corp. have agreed to terminate their June 22, 2006 merger agreement. EPL says that the company is now free to explore strategic alternatives to maximize stockholder value, including the possible sale of the company.
EPL issued the following statement:
"EPL has been, and remains, fully committed to acting in the best interests of our stockholders. While the EPL Board believed that the addition of Stone's complementary properties and assets would have been an excellent strategic fit for us, the Board has concluded that the exploration of strategic alternatives is in the best interests of EPL stockholders. The Board recommends that EPL's stockholders reject the unsolicited tender offer of ATS Inc., which the Board determined to be inadequate and not in the best interests of EPL's stockholders. EPL's solid track record of operational success and the strong potential of our attractive Gulf of Mexico properties and prospects place us in a strong position to explore strategic alternatives to maximize value for our stockholders."
In connection with the termination of the merger agreement with Stone, EPL has agreed to pay Stone an $8 million termination payment and EPL and Stone have agreed to release all claims between them relating to the merger agreement.
The $8 million payment represents a $17.6 million discount from the fee that would have been payable by EPL to Stone under certain circumstances.