Energy Partners, Ltd (EPL) has had a wild year!  In June 2006, EPL announced a $2.2 billion merger with Stone Energy (SGY).  Then in August 2006, Australia's Woodside Petroleum wanted to buy EPL for $23 per share only if EPL canceled their plan to acquire Stone Energy.  EPL's board rejected the Woodside offer in September, however.  Yet, oddly enough, in October EPL terminated the merger agreement with Stone Energy as well.  Fast forward to January 2007 and the company said it was in takeover talks again!  By mid-March no buyers were found and the company announced a self-tender offer for 22% of the company's shares at $23.  The self-tender will be funded by debt and selling of assets.  In addition, once the self-tender is completed, the company will buy back another $50 million in the open market within a year. 

Today the stock closed at $18.  Either I'm missing something, or the market has not yet caught up with the tender-offer announcement.  If the company is offering $23 a share, or a 28% premium to today's share price, the stock should go up.  Even if you don't tender your shares to the company directly, the total share pool will be reduced by 22% meaning each share should be worth more than today.

The only drawback is the balance sheet has a lot of debt and their earnings took an odd impairment last year plus they had a major increase in administration expenses.

What do you think?