Vaalco Energy shareholders to vote on poison pill

Vaalco Energy Inc., which is suing its largest shareholder, said late Wednesday its board plans to submit the company's stockholder rights plan to a vote at the company's 2009 annual meeting of shareholders.

A shareholder rights plans, or "poison pill" provision, generally makes a hostile takeover more expensive for the buyer. If stockholders do not ratify the rights plan, which was adopted in September 2007, it will be canceled.

Vaalco is currently fighting an attempt by its largest shareholder and an affiliate to seat three representatives on its board. New York hedge fund Nanes Delorme Partners I LP, its biggest shareholder, urged Vaalco to put itself up for sale in March.

Vaalco is suing Nanes Delorme and Pilatus Energy SA of Zug, Switzerland, claiming that the investors have conflicts of interest and filed misleading documents as part of its effort to win the board seats.

"The adoption of the rights plan, together with the board's decision to submit the plan for ratification by Vaalco stockholders in 2009, serve to both protect stockholders' interests and provide the time needed to execute the company's imminent drilling program so that Vaalco stockholders have the opportunity to maximize their return on these investments," said Chairman and Chief Executive Robert L. Gerry III in a statement.

The company's annual meeting is scheduled for June 4.