Why Venoco's Shares Popped (VQ)

Why Venoco's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of oil and gas explorer Venoco (NYSE: VQ ) jumped 17% today when word leaked out that its CEO is lining up financing to buy the company.

So what: CEO Tim Marquez, who owns 50.3% of shares, has offered to buy the remaining share of the company for $12.50 per share, and he may be moving closer to financing the deal. He is in advanced talks about a $436.5 million package that would include debt, asset sales, and capital raises to buy out the company.

Now what: Since shares closed yesterday at $9.53, the market hasn't had a lot of faith that Marquez's offer would wind up in an actual buyout. But rising energy prices may make a deal easier to pull off; if financing comes through a deal may close as early as September. I don't like betting on acquisitions, but with an offer in place this one looks like a likely deal, so I think shares will move higher in the next month or so.

Interested in more info on Venoco? Add it to your watchlist by clicking here.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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