Encore Energy Partners LP
Robbins Umeda LLP Is Investigating Vanguard Natural Resources LLC’s Offer to Acquire Encore Energy Partners LP
Robbins Umeda LLP, a shareholder rights litigation firm, is interested in helping unitholders of Encore Energy Partners LP. The firm has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the board of directors of Encore Energy Partners LP (NYSE: ENP) in connection with Vanguard Natural Resources LLC’s (NYSE: VNR) offer to purchase all of Encore Energy’s outstanding publicly-held units.
On March 25, 2011, Encore Energy announced it received a proposal from Vanguard to purchase all of Encore Energy’s outstanding publicly-held units through a unit-for-unit exchange. Vanguard owns 100% of the general partner of Encore Energy and owns approximately 46% of the outstanding common units of Encore Energy. Under the terms of the current offer, Vanguard would offer 0.72 Vanguard common units for each outstanding publicly-held Encore Energy common unit. Based on Vanguard’s closing unit price on March 24, 2011, the offer values each Encore Energy unit at $23.20.
The investigation is focused on whether Encore Energy’s board of directors is undertaking a fair process to obtain maximum value for its unitholders. Notably, at least one analyst had a recent price target of $24.00 per unit, and just over a month ago, units traded as high as $23.90. Further, Encore Energy posted record fourth quarter 2010 earnings before interest, taxes, depreciation, and amortization of $80.4 million, up 43% over the same period in 2009. The company also reported generated distributable cash flow of $57.5 million, a 28% increase over the $45.1 million generated in 2009. Finally, Encore Energy reported net income of $21.9 million in 2010 compared to a net loss of $95.7 million in 2009.
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