JANA Partners Calls on Houston Exploration to Begin Direct Discussions on JANA's Acquisition Offer
22 June 2006 - 11:46PM
PR Newswire (US)
NEW YORK, June 22 /PRNewswire/ -- JANA Partners LLC ("JANA") today
called on the Board of Directors of The Houston Exploration Company
(the "Company") (NYSE:THX) to move forward on JANA's offer to
purchase the Company for $62 per share in cash. In a letter sent
today to the Board, JANA offered to enter into a standstill and
confidentiality agreement with the Company in exchange for being
allowed to begin immediate due diligence, which JANA noted could
cause it to arrive at an even higher offer price than $62 per
share. Since making its offer on June 12, 2006, JANA has increased
its ownership position in the Company and is currently its largest
shareholder, with approximately 12.8% of the Company's outstanding
shares. JANA Managing Partner Barry Rosenstein noted in today's
letter that during this time the Board had yet to make any
inquiries or attempts to begin discussions regarding JANA's offer.
"While this communications barrier has given us no choice but to
address the Board publicly, our preference is to acquire the
Company on a negotiated basis through direct discussions with the
Board," Mr. Rosenstein wrote today. "To that end, we hereby inform
you that we are willing to enter into a customary standstill and
confidentiality agreement in exchange for the opportunity to begin
immediate due diligence on the Company. We believe this diligence
could be completed promptly and may of course lead us to an even
higher offer price than $62 per share." A proposed standstill and
confidentiality agreement was provided by JANA to the Board
together with today's letter. The full text of JANA's letter is
attached as an exhibit to this press release. Background On June
12, 2006, following what it said were repeated attempts to engage
the Board in substantive discussions regarding the maximization of
shareholder value, JANA offered to purchase Houston Exploration for
$62 per share. While subject to customary diligence and
documentation, JANA's offer is not subject to any financing
condition. JANA, a Delaware limited liability company, holds the
Company's common stock in various accounts under its management and
control. ATTACHMENT: FULL TEXT OF JUNE 22, 2006 LETTER FROM JANA
PARTNERS LLC TO THE BOARD OF DIRECTORS OF THE HOUSTON EXPLORATION
COMPANY June 22, 2006 The Board of Directors The Houston
Exploration Company 1100 Louisiana Street, Suite 2000 Houston,
Texas 77002 Attention: William G. Hargett, Chairman, CEO &
President VIA FACSIMILE AND OVERNIGHT DELIVERY Gentlemen, It has
been ten days since JANA Partners LLC ("we" or "us") offered to
purchase The Houston Exploration Company (the "Company") for $62
per share. We have continued to increase our ownership position
since making our offer and as of last Friday became the largest
shareholder of the Company with 12.8% of the shares outstanding.
Yet in this time we have not received any inquiries or attempts to
begin discussions regarding our offer from the Board of Directors
(the "Board") or its advisers. This silence is of course consistent
with the Board's response to our many private and public attempts
to begin a substantive dialogue. In fact, contrary to what we
understand management has suggested to other parties, we have not
had private discussions with the Company despite our numerous
efforts including individual calls to each member of the Board.
While this communications barrier has given us no choice but to
address the Board publicly, our preference is to acquire the
Company on a negotiated basis through direct discussions with the
Board. To that end, we hereby inform you that we are willing to
enter into a customary standstill and confidentiality agreement (a
proposed draft of which is attached hereto) in exchange for the
opportunity to begin immediate due diligence on the Company. We
believe this diligence could be completed promptly and may of
course lead us to an even higher offer price than $62 per share.
Separately, in our experience silence from the Board usually
indicates an attempt to follow a predetermined path without regard
to shareholder value. We therefore also wish to put the Board on
clear notice that it would evidence tremendous bad faith and a
disregard for their duties in our opinion were they to use this
period, which the Board has staked out for consideration of the
Company's future, to silently pursue overpriced acquisitions. We
remain prepared to take all necessary action, including holding
directors personally liable if warranted and taking all appropriate
action to prevent such transactions, should the Board do so. We
look forward to the Board's timely response to this proposal.
Sincerely, /s/ Barry Rosenstein Barry Rosenstein JANA Partners LLC
Managing Partner DATASOURCE: JANA Partners LLC CONTACT: JANA
Partners LLC, +1-212-692-7696
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