EXCO CEO says $4.36 billion bid a bet on assets, not gas

By Krishna N Das

BANGALORE (BestGrowthStock) – EXCO Resources Inc’s (XCO.N: ) CEO said his $4.36 billion bid for the gas-focused explorer he helms was not contingent upon gas prices but assets, and he did not want a highly leveraged deal.

EXCO Chief Executive Douglas Miller recently teamed up with investors including oilman T. Boone Pickens to bid for the Dallas-based company.

“I don’t want to start with too much leverage … If investors say we got to put a lot of leverage, I’m going to back off. We need a lot of equity,” the CEO said on a call with analysts.

The executive, who currently has a 2.15 percent stake in EXCO and offered to buy the remaining shares at $20.50 apiece, also said, “Pickens was very interested in teaming up with us, if we can get it done.”

“Fair offer, in-line with our one-year target price … This announcement is likely to benefit undervalued shale gas producer,” Scotia Capital said in a note.

Miller said he believes gas was going to be cheap for at least next 12-18 months and hence there was an opportunity to go private and make some acquisitions.

“This is not a bet on gas. I’m betting on the assets and the people,” he said.

EXCO executives said the company was looking at acreage buys in Haynesville and Marcellus shales.

“The last couple of days, between guys threatening to sue me, somebody is saying they might be interested, and I never heard of them, I wouldn’t call that a real indication of interest,” Miller, who had taken EXCO private for $18 per share in 2003, said on the call.

EXCO’s shares, which are up by a third since the offer was made public on Monday, were down 2 percent at $18.65 on Wednesday on the New York Stock Exchange.

(Reporting by Krishna N. Das in Bangalore; Editing by Vyas Mohan)

EXCO CEO says $4.36 billion bid a bet on assets, not gas