Vanguard Natural buying rest of Encore Energy

July 11, 2011 7:18:12 AM PDT
Oil and gas company Vanguard Natural Resources LLC is buying the rest of Encore Energy Partners LP for stock worth about $538 million, the companies said Monday. Encore will become a wholly-owned subsidiary of Vanguard's operating company Vanguard Natural Gas LLC. Encore Energy focuses on the acquisition, production and development of natural gas properties.

Under the deal's terms, Encore's unitholders will receive 0.75 Vanguard common units in exchange for each Encore common unit they own. That represents a 4.4 percent premium to Encore's closing price on March 24, the last trading day before Vanguard announced its initial proposal to buy the 54.4 percent of Encore it didn't own.

As part of the deal, Vanguard will issue about 18.4 million additional shares.

Those shares were worth $538.2 million at Friday's closing price of $29.25 per share. Vanguard shares fell 8 cents to $29.17 in morning trading Monday. Vanguard previously owned a 45.6 percent stake in Encore Energy.

Encore Energy shares fell 15 cents to $21.59 in morning trading Monday.

The acquisition of the remaining shares is expected to close in the fourth quarter.

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