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Hedge fund Jana Partners offered to buy

Houston Exploration


for $62 a share Monday after a six-month campaign of activism at the energy company.

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Jana, which claims to have more than $5 billion in assets, says its takeover offer isn't subject to financing. The hedge fund already owns more than 12% of Houston Exploration's stock and has repeatedly pressed the company to put itself up for sale.

"We believe that there is still tremendous value in Houston Exploration, but that it will continue to be destroyed as long as the company remains in the hands of those who show far less interest in maximizing this value than they do in transferring it to the company's management," Jana said in a letter to the company's board.

Of particular concern to Jana has been a plan by Houston Exploration to use proceeds from a recent asset sale on debt redemption and acquisitions rather than share repurchases.

"Despite having had almost three months to review JANA's detailed analysis demonstrating what it believes are the substantially higher shareholder returns this share repurchase would generate compared to new acquisitions and debt repayment, the board has yet to substantively respond or to offer any analysis to support their stated plans," Jana said.

The stock rose $3.61, or 6.6%, to $58.26 early Monday.