BANGALORE Quicksilver Resources Inc KWK.N refused to amend its rights plan in the absence of a definite buyout proposal, preventing its largest shareholder group from launching any potential joint bid for the oil and gas company with other shareholder groups.
Quicksilver Resources on Monday said it signed a confidentiality agreement with an investor group that controls more than 28 percent of stake and includes its Chief Executive Glenn Darden, Chairman Thomas Darden, and Darden family controlled Quicksilver Energy LP.
Last week, the investor group had requested Quicksilver Resources to amend it rights plan so that the group could hold talks with the company's second largest shareholder SPO Partners -- owner of about 15 percent -- regarding a potential deal or other strategic alternatives for the company.
However, neither SPO nor the group made any concrete offer or gave further details of their plans.
"The transaction committee ... does not intend to waive certain restrictions of the company's shareholder rights plan, as requested by the investor group, until it receives and evaluates a proposal from the investor group," the company said in a statement.
The existing rights plan is set to trigger at 15 percent, but excludes the Darden family's stake. An amendment to the plan would have enabled the family to hold talks with SPO regarding taking the company private or any other deal, according to the statement.
Quicksilver Resources declined to divulge further details regarding any transaction. SPO Partners could not immediately be reached for comment.
Quicksilver Resources, which has formed the transaction committee to oversee any potential deal, said it will provide certain non-public information to the group.
The investor group has agreed to refrain from adding to its stake in Quicksilver Resources in the next six months without prior approval from the committee.
"We think the direction the company is going to take is fuzzy ... it has left Quicksilver Resources in a sort of purgatory," said analysts at Howard Weil, in a note to clients.
Quicksilver Resources' shares have risen about 20 percent since October 18, when the management-led investor group announced its intent to explore a sale or take the company private.
"While we do not think there is a lot of near-term downside in the stock with the potential take-out looming, we also do not think there is a lot of upside," Howard Weil analysts said, cutting their rating to "market perform" from "market outperform." Their price target was unchanged at $17.
The company, which is focused in the unconventional rock formations, owns properties in Texas, Colorado, Wyoming as wells as Canada's Alberta and British Columbia.
Shares of the company were trading up about 1 percent at $15.30 Monday afternoon on the New York Stock Exchange.
(Reporting by Adveith Nair and Krishna N Das; Editing by Gopakumar Warrier)