Newspaper article THE JOURNAL RECORD

Shareholder Files Lawsuit to Block Apco-Pluspetrol Merger

Newspaper article THE JOURNAL RECORD

Shareholder Files Lawsuit to Block Apco-Pluspetrol Merger

Article excerpt

TULSA - A shareholder filed a lawsuit in Tulsa County District Court against Apco Oil and Gas International Inc., seeking to halt the sale of the company.

Michael Italiaander filed a class-action lawsuit on Oct. 23 targeting Apco and its majority stockholder, WPX Energy. Apco, an international oil and gas exploration and production company, operates in Argentina and Colombia.

On Oct. 3 Apco announced that it planned to merge with Pluspetrol Black River Corp. in a $427 million deal. Apco and Pluspetrol Black River would then become an operating unit of Pluspetrol Resources Corp.

Apco stockholders would receive $14.50 cash per share, according to the agreement.

In a 26-page petition, Italiaander said the merger undervalued Apco.

Apco stockholders will not receive fair value for the common stock, according to the petition prepared by attorneys William B. Federman and Gregg J. Lytle of the Oklahoma City law firm Federman and Sherwood.

"The proposed transaction undervalues Apco and is the result of an entirely unfair sales process," the plaintiff's attorneys wrote.

The stock offer is about 14 percent more than the company's closing stock price on Oct. 2, when Apco shares closed at $12.64, the plaintiff claimed.

However, the average closing stock price during the 30 days preceding published reports of the deal was $13.41 per share, a price that was 7.6 percent below the merger offer, according to the lawsuit. Apco common stock traded as high as $14.01 as recently as Sept. 22 and the company's 52-week high closing stock price was $15.99.

Calls to the plaintiff's attorneys were not returned.

A spokesman for WPX Energy declined to comment.

The plaintiff claimed in the petition that WPX Energy will push for the transaction because the Tulsa-based energy company controls 69 percent of the outstanding shares. WPX stands to receive $294 million once the transaction is complete, according to the lawsuit.

The plaintiff claimed sales negotiations were flawed and designed to ensure the sale of Apco to Pluspetrol. …

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