Delta Petroleum Looks at Alternatives
The possible sale of the Tracinda-owned oil and gas developer follows management changes at the Denver-based company last week.
November 30, 2009
Delta Petroleum Corporation launched a strategic review, a move that comes almost two years after Kirk Kerkorian's Tracinda Corp. bought a 35% in the publicly held oil and gas developer.
The Denver-based company said it has hired Morgan Stanley and Evercore Partners to advise the board on its strategic exploration. The transaction may include the sale of the oil and gas company’s assets or the entire company.
Delta’s exploration of a possible sale is viewed as a move that could satisfy Kerkorian, who lost a large part of his net worth over the past two years.
Tracinda invested roughly $684 million in Delta, paying $19 a share at the time. Ahead of today's news, Delta's stock was trading below a dollar.
Roger Parker, Delta’s chief executive and chairman, resigned in May, and Daniel J. Taylor, a Tracinda executive, was named chairman of the oil and gas company. The company’s president, John Wallace will remain in his current position. In addition, he will act as senior executive of the company until a CEO is named.
Nevada-based Tracinda acquired a 35 percent stake in Delta in December 2007 for $684 million, and raised its stake in the company to 48.5% in November 2008.
Taylor joined Delta’s board of directors in February 2008 and was a director of the resort casino properties company MGM Mirage since March 2007. He was president of movie studio Metro-Goldwyn-Mayer Inc.
Kerkorian's market timing has been off in recent years. In April 2008, Kerkorian began acquiring stock in Ford Motor Company, eventually holding a 6% stake in the company. He began to exit the investment in October 2008, selling his remaining stake in Ford on December 2008, prior to the dramatic recovery of the automaker’s stock.
Calls placed to Tracinda and Delta were not returned by press time.
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