San Diego, Jan. 24, 2012 (Shareholders Foundation) -- An investor in shares of NYSE: VQ filed a lawsuit in State Court against directors of Venoco, Inc in effort to block the proposed acquisition of Venoco by its Chairman and CEO for $12.50 per share in cash.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to Venoco, Inc. (NYSE:VQ) investors arising out of the attempt to sell Venoco at an unfair price via an unfair process.

In August 2011 Venoco, Inc. (NYSE: VQ) announced that its board of directors has received a non-binding proposal from Timothy M. Marquez, Chairman and CEO of the company and the holder of approximately 50.3% of Venoco's outstanding common stock, to acquire all of the outstanding shares of Venoco common stock for $12.50 per share in cash.

On Jan. 16, 2012 Venoco Inc announced that it has entered into a merger agreement under which its Chairman and CEO will acquire Venoco through a wholly owned entity, Denver Parent Corporation.

However, the plaintiff alleges that the $12.50offer undervalues NYSE VQ shares. In fact, NSE: VQ shares traded as high as $14.75 as recently as July 22, 2011 and as high as $18.59 on April 29, 2011 and as high as $22.22 on February 2, 2011, thus well above the $12.50 offer. Additionally at least one analyst has set the high target price at $22 per share and the low target price at $14 per share. With a median Target price of $19.50 set by analysts the $12.50offer is well below the lowest target price. Furthermore Venoco’s financial performance has been increasing over the past two years. Venoco’s annual Total Revenue rose from 4270.49million in 2009 to $295.29million in 2010 and it was able to pull out of a Net Loss of $47.30million for 09 and report a Net Income of $67.52million for 2010. Its second quarter Revenue rose from $70.06million last year to $87.29million this year and its second quarter Net Income increased from $3.71million a year earlier to $19.02million.

Further the plaintiff claims that the process is unfair to the remaining shareholders of Venoco. In fact, the Chairman and CEO Venoco Inc holds already approximately 50.3% of Venoco's outstanding common stock. In addition, so the lawsuit, the members of the board of directors also breached their fiduciary duties by agreeing to preclusive deal protection devices, such as a no-solicitation provision, a matching right provision, a up to $10million termination fee provision, that collectively preclude any competing offers for the company.