- 18Oct
Quicksilver Resources Inc. (KWK) said a group of shareholders led by the company's ruling Darden family wants to review alternatives for the natural-gas company that include taking it private for a "substantial premium."
Shares leapt 17% to $14.80 in recent trading and earlier hit $14.97, the highest since April.
Quicksilver focuses on unconventional reservoirs and has 130,000 net acres in the Horn River Basin shale gas field in British Columbia. The Fort Worth, Texas, company said last month its discoveries there could quadruple its energy assets, but shares had remained static despite the company's bullishness on the project.
The potential privatization was disclosed in a letter from members of the Darden family and Quicksilver Energy LP. It didn't provide a valuation for the company but said the group expects "any such proposal made by us would involve a substantial premium to the current market price."
The Dardens control about 30% of Quicksilver together with their investment entity Pennsylvania Management LLC.
Chief Executive Glenn M. Darden and brother Chairman Thomas F. Darden founded Quicksilver and took it public in 1999. Since its initial public offering at $1.25 in March of 1999, the shares have surged, though they are well off the highs above $40 they hit in 2008 when gas prices were soaring.
The group said another major shareholder, SPO Partners & Co., has expressed interest in reviewing options for the company, and requested Quicksilver amend its rights plan to permit the two parties to engage in discussions.
SPO holds another 15% of the outstanding shares, second only to the Darden's Pennsylvania Management company, meaning as a whole the two groups would already hold close to 45% of Quicksilver.
The board established an independent committee to consider any transactions and has already hired investment banks Credit Suisse Group (CS) and Tudor Pickering, Holt & Co. to assist it.
Capital One Southcoast analysts said the stock is overvalued but has continued to sell assets better-than-expected and could get a higher takeout, though they didn't give a price.
Shale plays have become a hot asset for companies, as the technology in the industry has only recently allowed them to be tapped for resources. Shales, natural rock formations, could represent significant oil and gas resources and have attracted many mergers and acquisitions in the past year.
Glenn Darden had said last month the company had "never found a shale like the Horn River shale." He also said that while prices are low, the company could keep the product in the ground and wait until prices increase.
