(Source: Fort Worth Star-Telegram (Fort Worth, Texas))
By Jack Z. Smith, Fort Worth Star-Telegram, Texas
Nov. 4--After a robust 20.5 percent gain Monday, the stock price of Fort
Worth-based Encore Acquisition Co. dipped slightly Tuesday.
The stock of the oil and natural gas exploration and production firm
(ticker: EAC) closed down 14 cents at $44.53 a share, still up $7.46 from
Friday's close.
The stock jumped Monday based on the announcement that Denbury Resources
of Plano plans to buy Encore in a deal valued at $4.5 billion. It would be the
largest U.S. oil and gas acquisition this year, according to Bloomberg News.
The board of each company has approved the deal, but shareholders of each
must still vote on it. The deal isn't expected to close until early next year.
Denbury stock (DNR) also fell moderately Tuesday, closing down 19 cents
at $12.90. The stock tumbled by 10.3 percent, or $1.51 a share, on Monday.
The deal would create one of the largest independent energy producers in
North America that focuses mainly on oil rather than gas. Denbury would be the
surviving company and would remain based in Plano. Most of Encore's 425
employees are expected to be offered jobs by Denbury.
Also Tuesday, the law firm of Philadelphia attorney Brian M. Felgoise
said it is investigating whether the proposed deal "provides adequate value"
to Encore shareholders. The plan was similarly challenged Monday by Harwood
Feffer L.L.P., a law firm with a New York office.
Encore stockholders would receive $50 for each share: $15 in cash and $35
in stock. The $50 purchase price is nearly 35 percent higher than the stock's
closing price of $37.07 on Friday, before the deal was announced.
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