Ross Builds Exco Stake After CEO's Bid To Take Co Private
December 10 2010 - 6:29PM
Dow Jones News
Billionaire turnaround investor Wilbur Ross has built up a 7.5%
stake in Exco Resources Inc. (XCO), nearly all of it since the Fort
Worth company's chief executive announced he would try to take the
natural-gas producer private.
Exco said in a regulatory filing that Ross and entities he
controls have bought 15,882,301 shares this quarter. More than 96%
of those shares were acquired after Chief Executive Douglas Miller
announced a $4.4 billion bid to buy the company on Nov. 1,
according to the filing.
Ross already held a 0.88% stake in Exco at the end of the third
quarter through his WL Ross & Co. The shares he has acquired
since Oct. 1 have a value of nearly $294 million at Friday's
closing stock price of $18.51.
Miller's bid equates to $20.50 per share. Exco's board has
formed a special committee to study the offer and hired Barclays
Capital Inc. and Evercore Partners as its independent financial
advisers.
Miller, who is also Exco's chairman, has twice taken the
companies he's headed private. In 2003 he led a buyout of Exco
shareholders and took the company public again in 2006. Prior to
that he took Coda Energy Inc., a Dallas oil and gas explorer,
private.
In his Nov. 1 letter to Exco's board, Miller said he had
discussed the latest bid with private-equity firms Oaktree Capital
Management LP and Ares Management LLC, as well as billionaire oil
tycoon T. Boone Pickens, who is on the Exco board.
Together Oaktree, Ares and Pickens owned more than 27% of
shares, while Miller and his management team control another 13%,
according to FactSet Research. Miller owned more than 2% of Exco's
stock at the end of the third quarter.
Exco has generally focused on acquiring established oil and
natural-gas fields and squeezing additional output from them. Exco
currently has production holdings in Texas, Louisiana, Pennsylvania
and West Virginia.
The company said recently it would double spending in 2011 and
ramp up drilling in its Texas and Louisiana shale formations with a
40% increase in output in mind.
-By Ryan Dezember, Dow Jones Newswires; 713-547-9208;
ryan.dezember@dowjones.com