Amended Statement of Beneficial Ownership (sc 13d/a)
October 06 2015 - 1:32PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)
(Amendment No. 1)1
Common Stock, $0.10 par value per share
(Title of Class of Securities)
PAUL A. BELL
GROUP 42, INC.
312 Pearl Pkwy., CIA Building II, Suite 2403
San Antonio, TX 78215
(210) 824-1735
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CARMELO M. GORDIAN
ANDREWS KURTH LLP
111 Congress Avenue, Suite 1700
Austin, TX 78701
(512) 320-9200
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STEVE WOLOSKY, ESQ.
OLSHAN FROME WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
_______________
1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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1
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NAME OF REPORTING PERSON
Group 42, Inc.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
Paul A. Bell
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
BLR Partners LP
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
BLRPart, LP
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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|
8
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SHARED VOTING POWER
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|
9
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SOLE DISPOSITIVE POWER
|
|
10
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SHARED DISPOSITIVE POWER
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|
11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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|
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
BLRGP Inc.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
Fondren Management, LP
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
FMLP Inc.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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8
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SHARED VOTING POWER
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|
9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
The Radoff Family Foundation
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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|
8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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|
10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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1
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NAME OF REPORTING PERSON
Bradley L. Radoff
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) x
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7
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SOLE VOTING POWER
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|
8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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14
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* Includes 1,938,905 Shares owned directly.
The following constitutes Amendment No. 1 (“Amendment No. 1”) to the Schedule 13D filed by the undersigned (the “Schedule 13D”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.
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Item 4.
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Purpose of Transaction.
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Item 4 is hereby amended to add the following:
On October 6, 2015, the Reporting Persons delivered a letter to the Board of Directors of the Issuer (the “Board”), and issued a press release disclosing the letter, setting forth certain concerns the Reporting Persons have with the Board and its recent actions. Specifically, the letter discusses the Reporting Persons’ concerns regarding the Issuer’s corporate governance, particularly the Board’s recent adoption of a poison pill, the Issuer’s bloated G&A expenses, its poor capital allocation, the Board’s poor decision making with respect to capital expenditures and the renewal of the CEO’s employment contract. The foregoing description of the letter does not purport to be complete and is qualified in its entirety by reference to the full text of the letter, which is filed as Exhibit 99.1, and is incorporated herein by reference.
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Item 7.
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Material to be Filed as Exhibits.
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99.1
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Letter to the Issuer’s Board of Directors, dated October 5, 2015.
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SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: October 6, 2015
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BLR Partners LP
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By:
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BLRPart, LP
General Partner
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By:
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BLRGP Inc.
General Partner
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Sole Director
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BLRPart, LP
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By:
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BLRGP Inc.
General Partner
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Sole Director
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BLRGP Inc.
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Sole Director
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Fondren Management, LP
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By:
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FMLP Inc.
General Partner
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Sole Director
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FMLP Inc.
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Sole Director
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The Radoff Family Foundation
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By:
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/s/ Bradley L. Radoff
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Name:
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Bradley L. Radoff
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Title:
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Director
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/s/ Bradley L. Radoff
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Bradley L. Radoff
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Group 42, Inc.
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By:
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/s/ Paul A. Bell
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Name:
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Paul A. Bell
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Title:
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President and Chief Executive Officer
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/s/ Paul A. Bell
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Paul A. Bell
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Exhibit 99.1
October 5, 2015
The Board of Directors
VAALCO Energy, Inc.
9800 Richmond Ave., Suite 700
Houston, TX 77042
Board members:
As you know, Bradley Radoff (and related entities) and Group 42, Inc. (together the “Group”) collectively own 11.1% of the outstanding common stock of VAALCO Energy (the “Company”) in comparison to 1.9% of the Company’s outstanding common stock owned by the senior executive officers and you.
Under your stewardship, VAALCO has seen significant shareholder value destruction – a 77% drop in the share price in the past twelve months that exceeds the decline in the price of oil as well as the market price of the Company’s peer group. This precipitous and disproportionate decline in stockholder value is an alarming fact that has the Group very concerned as well as determined to take all necessary actions to protect the value of all stockholders’ investment in the Company.
Specifically, the Board is accountable for the following:
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·
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Abysmal corporate governance. Immediately after we disclosed the Group’s 11% ownership stake, the Board rushed to adopt a poison pill with a 10% ownership trigger, thereby blocking the Group from acquiring additional shares and purporting to restrict us from communicating with our fellow shareholders regarding the best means to increase the value of our investment in the Company. Given that in 2009 VAALCO’s shareholders overwhelmingly voted against the adoption of a poison pill, last week’s action by the Board is a blatant disregard of shareholders’ views on this topic. In a difficult business environment, your decision to spend precious corporate resources to entrench yourselves from the actual owners of the business will only serve to perpetuate the Company’s poor performance without accountability.
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·
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Bloated G&A expenses. The Company’s last twelve months of cash G&A is approximately 20% of the Company’s enterprise value. Despite industry wide layoffs and G&A reductions, the Company has failed to announce any specific cuts to G&A and has offered shareholders nothing but vague promises of “G&A cost review and rationalization.”
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·
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Poor capital allocation. The Company has engaged in inadequate risk management with no hedging, excessive exploration risk and exploration commitments, including most damagingly, recklessly risking and losing almost $30 million in a failed high risk exploratory well in Angola.
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·
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Rampant capital expenditures. Despite industry wide cutting of capital expenditures, VAALCO’s management has increased the Company’s top-range capex guidance for 2015 from $75 million to $80 million. In the last twelve months the Company’s capex has been an astounding 150% of the Company’s current enterprise value.
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·
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Renewal of CEO contract. Despite a clear public record of value destruction during his tenure as CEO, the Board renewed Mr. Guidry’s contract while providing him with significant additional compensation in the event that he is terminated following a “change in control”—which includes a change in the majority of the Board as a result of a proxy contest initiated by the Company’s stockholders. Mr. Guidry’s large-company background has proved to be ill-suited for VAALCO as demonstrated by his failure to quickly and appropriately respond to a challenging commodity environment and his inability to manage with limited resources. The Board’s renewal of Mr. Guidry’s contract took place despite a letter from Group 42 three weeks earlier requesting consultation regarding the hiring of a CEO. The Board did not provide us with the courtesy of a response to this letter and instead ignored our input as well as our invitation to discuss this important management issue with a significant shareholder.
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In summary, shareholders deserve better. Unlike senior management and yourselves, the Group has made a significant investment in VAALCO. We are deeply troubled by the Board’s recent actions, and we are prepared to take all actions necessary to ensure that the Board is composed of individuals committed to act in the stockholders’ – as opposed to their own – best interests.
Sincerely yours,
/s/ Bradley L. Radoff
Bradley L. Radoff
/s/ Paul A. Bell
Paul A. Bell
Chief Executive Officer and President
Group 42, Inc.
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