After the announcement by Hess Corp to take over American Oil & Gas Inc. an investigation on behalf of current investors of American Oil & Gas Inc. (AMEX:AEZ) over possible shareholder claims based on breach of fiduciary duty in connection with takeover attempt by Hess Corp. was announced.
American Oil & Gas Inc., located in Denver, CO is an independent oil and gas exploration and production company, engaged in acquiring oil and gas mineral leases and the exploration and development of crude oil and natural gas reserves and production in the United States Rocky Mountain region. American Oil & Gas Inc. reported in 2007 $1.97million, in 2008 $2.90million, and in 2009 $1.89million. On Thursday, July 28, 2010, American Oil & Gas Inc. (NYSE-AMEX: AEZ) and Hess Corporation (NYSE: HES) announced that Hess Corp. has agreed to acquire American Oil & Gas. Under the terms of the agreement, Hess Corp. has agreed to issue 0.1373 shares of its common stock in exchange for each outstanding share of American Oil & Gas' common stock (AEZ). Hess Corp. shares traded at $53 per share before the announcement and at $52.62 per share after the announcement. HES stock are down from its52weekHigh of $66.49 per share and up from its 52weekHigh of 48.48. According to American Oil & Gas Inc its Boards of Directors approved the agreement and the offer represents a 9.4 percent premium to American Oil & Gas stockholders based on the closing stock prices of Hess' and American Oil & Gas' shares on July 27, 2010.
Shares of American Oil & Gas Inc. (AEZ) traded at $6.75 per share before the takeover news and increased to $7.25 per share after the announcement. But AEZ shares traded at $7.49 per share as recent as May 12, 2010, at $7.60 per share as recent as May 03, 2010, and the median price target for American Oil & Gas (AEZ) stock set by analysts is $8.50 per share with at least one analyst setting a price target at $10.00 per share.
The investigation by a law firm concerns whether Hess Corp, as well as the directors of American Oil & Gas Inc. breached their fiduciary duties by not acting in American Oil & Gas Inc. (AMEX:AEZ) shareholders' best interests in connection with the sale process of American Oil & Gas (AEZ), whether the American Oil & Gas Board of Directors breached their fiduciary duty to American Oil & Gas Inc. (AMEX:AEZ) stockholders by failing to adequately shop the Company prior to entering into the agreement, whether the Board of Directors breach their fiduciary duties by not seeking a deal that will provide better value for American Oil & Gas Inc., and whether Hess Corp. is underpaying for American Oil & Gas Inc. (AEZ), thus unlawfully harming AEZ stockholders.