NEW YORK, Oct. 19 /PRNewswire/ -- Sandell Asset Management Corp.
("Sandell") today sent a letter to Mr. James Flores, Chairman, President,
and CEO of Plains Exploration and Production Company ("Plains," "PXP" or
the "Company") (NYSE: PXP). Sandell also disclosed beneficial ownership of
5.1% of shares of Plains' common stock in a Schedule 13D filed with the
Securities and Exchange Commission today. In the letter to Mr. Flores,
Sandell stated that while it is inclined to support the Pogo transaction,
it is concerned by Plains' management's inability to provide a strategic
plan for the combined company post-closing. The letter further states that
Sandell insists the Company provide such a plan and take the following
actions immediately after the close of the transaction:
-- Asset sales -- PXP should immediately prepare for a large asset
divestiture in the 4th quarter of 2007 with all sale proceeds dedicated
to share repurchases. Further, the Company should continue to
opportunistically monetize Gulf of Mexico reserves and non-core assets
consistent with management's prior commitments.
-- MLP creation -- Prior to the announcement of the Pogo deal, PXP was
reviewing the formation of an MLP for virtually all of the reserves in
California and the Piceance basin. In PXP's recent press release dated
10/9/07, the language on MLP formation remained vague, doing little to
inform PXP investors. Investors need a definitive plan and timetable
for MLP creation and drop-downs by which management can be held
-- Stock repurchases -- Historically, PXP has been an aggressive purchaser
of its own shares. Sandell is concerned that potential complications
related to the Pogo transaction, asset sale delays or an unwillingness
to repurchase shares may contribute to further share price
underperformance. Aggressive share repurchases must be a key part of
the value realization plan going forward.
"Plains is an excellent company and has historically created a lot of
value for investors. We believe the recent underperformance is related to
confusion in the market regarding the plan for the combined Company post-
closing including the timetable for asset sales and an MLP," said Thomas E.
Sandell, Chief Executive Officer of Sandell Asset Management Corp. "We
believe that management has an opportunity to create significant value for
investors of up to $90 per share, but that this value can only be
accomplished through aggressive execution of the actions we have
For further information, contact:
Mr. Thomas E. Sandell
Sandell Asset Management Corp.
About Sandell Asset Management Corp.
Sandell Asset Management Corp. is a multi-billion dollar global
investment management firm, founded by Thomas E. Sandell, that focuses on
global corporate events and restructurings throughout North America,
Continental Europe, the United Kingdom, Latin America and Asia. Sandell
frequently will take an "active involvement" in facilitating financial or
organization improvements accruing to the benefit of investors.
This release is for general informational purposes only. It does not
have regard to the specific investment objective, financial situation,
suitability, or the particular need of any specific person who may view it,
and should not be taken as advice on the merits of any investment decision.
The views expressed herein represent the opinions of Sandell and are based
on or derived from publicly-available information and third party reports
with respect to Plains Exploration and Production Company ("the Issuer").
Sandell has not sought or obtained consent from any third party to use
any statements or information as having been obtained or derived from
statements made or published by third parties. Any such statements or
information should not be viewed as indicating the support of such third
party for the views expressed herein. No warranty is made that data or
information, whether derived or obtained from publicly-available sources or
from any third party, are accurate.
Sandell shall not be responsible or have any liability for any
misinformation contained in any publicly-available sources or third party
report. There is no assurance or guarantee with respect to the prices at
which any securities of the Issuer will trade, and such securities may not
trade at prices that may be implied from this letter. Any estimates,
projections and pro forma information set forth are based on assumptions
that Sandell believes to be reasonable, but there can be no assurance or
guarantee that actual results or performance of the Issuer will not differ,
and such differences may be material. Sandell does not recommend the
purchase or sale of any security.
Under no circumstances is this letter to be used or considered an offer
to sell or a solicitation of an offer to buy any security. Sandell
currently holds shares of common stock of the Issuer. Sandell manages funds
and accounts that are in the business of buying and selling public
securities. It is possible that there will be developments in the future
that cause Sandell from time to time to sell all or a portion of its shares
in open market transactions or otherwise (including via short sales), buy
additional shares (in open market or privately negotiated transactions or
otherwise), or trade in options, puts, calls or other derivative
instruments relating to such shares.
SOURCE Sandell Asset Management Corp.