By Staff Report Monday, August 29th, 2011

[EDITOR’S NOTE: There’s an updated version of this story: “Venoco sued over CEO’s offer“]

The CEO of oil and gas company Venoco wants to take the company private in a proposed buyback deal that would value the entire company at $734 million.

Denver-based Venoco said Aug. 29 that CEO and Chairman Tim Marquez has offered $12.50 per share to buy the half of the company he doesn’t already own. The offer represents a 39.2 percent premium over Venoco’s closing share price of $8.98 on Aug. 26.

Venoco is based in Colorado but maintains significant oil-drilling operations off the coast of Santa Barbara County.
With 58.7 million shares outstanding, Marquez’s offer would value the entire company at almost $734 million.

In his letter to the board, Marquez said he was confident financing for the proposal could be obtained. “I expect that the company’s senior management team would remain in place. I anticipate continuing to run the business in accordance with our current practice and maintaining the company’s valuable employee base, which I view as one of its most important assets,” he said in the letter. His offer constitutes a 27 percent premium over Venoco’s average closing price in August, he said.

Venoco said in a statement that a committee consisting of all of the its independent directors excluding Marquez will consider the proposal. The committee will retain independent financial advisors and legal counsel to assist it, the company said.

Marquez and wife Bernadette own 50.3 percent of the firm. They took the company public in a $212.5 million offering in 2006, partly to help fund their philanthropic endeavors. The couple gave 2.5 million shares of Venoco stock, worth about $42.5 million, to establish an educational foundation in their name in Denver. The couple gave as equal amount to establish the Denver Scholarship Foundation.

Venoco shares had soared 30.3 percent to $11.70 in afternoon trading on Aug. 29 on news of the proposal.