NEW YORK (TheStreet) -- Capital One has downgraded EPL Oil & Gas (EPL) to "market perform" from "outperform," as the Delaware energy company is being investigated for its sale to Energy XXI for $2.3 billion.
Juan E. Monteverde of securities firm Faruqi and Faruqi will be investigating EPL's board of directors for potential breaches of fiduciary duties for possibly undervaluing EPL ahead of its sale, to the detriment of its shareholders.
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Energy XXI is offering EPL's shareholders $39 per share or 1.67 common shares of Energy XXI or a combination of both in the deal. This acquisition would make Energy XXI the largest publicly traded shallow water driller in the Gulf of Mexico. Shares of EPL were up 0.80% to $37.80 in morning trading.
TheStreet Ratings team rates EPL OIL & GAS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EPL OIL & GAS INC (EPL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."