Shares of Carrizo Oil & Gas Inc. surged 6.0% and Callon Petroleum Co. ran up 11% in premarket trading Monday, after Paulson & Co, a large Callong shareholder, said it plans to vote against the acquisition of Carrizo. Paulson also urged Callon to pursue a sales of the company. In a letter to Callon's board of directors, Paulson said Callon's stock has lost 36% since the acquisition deal was announced, Callon would lost its valuation as a "pure play" Permian producer, the premium paid for Carrizo is unjustifiable given its "inferior" assets and Callon's shares could be worth 64% more than current prices through a sale of the company. Callon had announced on July 15 a deal to buy Carrizo in an all-stock deal valued at $3.2 billion. Paulson said Monday it owned 21.6 million Callon shares, or 9.5% of the shares outstanding. Shares of Callon have shed 34.9% and Carrizo have dropped 23.5% over the past three months, while the SPDR Energy Select Sector ETF has slipped 3.7% and the S&P 500 has gained 3.7%.
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