By Sergio Chapa, Houston Business Journal
San Antonio holding company Group 42 has teamed up with a private investor to unseat the majority of the board of directors at Vaalco Energy Inc., a Houston-based company drilling for oil in Africa.
Over the past five months, both Group 42 and Houston-based investor Bradley Radoff have purchased a combined 11.1 percent of Vaalco's stock in a conjoined investment vehicle.
Vaalco (NYSE: EGY) posted combined losses of $44.2 million for the first two quarters of 2015 and postponed the release of its third-quarter figures until after the close of the market on Nov. 9.
But both Group 42 and Radoff filed a joint proxy statement with the U.S. Securities and Exchange Commission on Nov. 6 stating that the company's board of directors "failed to effectively oversee the business in a manner that adequately protects shareholder value."
Officials with Group 42 declined to comment, but in its filing, the San Antonio-based company and Radoff announced their intention to solicit consent from stockholders to remove four members of Vaalco's board of directors and replace them with Radoff and three other candidates: Peter Dickerson, Michael Keane and Joshua Schechter.
According to SEC filings, Group 42 and Radoff together own more than 6.4 million shares of Vaalco stock, which at the current market price of $2.15 per share is worth more than $13.9 million.
SEC filings show that Vaalco's board issued a "poison pill" with a 10 percent ownership trigger back in September. The move blocked Group 42 and Radoff from buying additional shares and restricted them from communicating with other shareholders.
Vaalco officials released a statement the afternoon of Nov. 6 stating that they are reviewing Group 42 and Radoff's joint proxy statement and are urging stockholders not to take any action.
"We are committed to acting in the best interests of the company and all Vaalco stockholders," Vaalco officials wrote in the statement. "Consistent with that commitment, the board and management team are focused on executing a strategic plan to drive enhanced stockholder value in a challenging environment for the oil and gas industry."