UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
THE HOUSTON EXPLORATION COMPANY
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(Name of Issuer)
Common Stock, $0.01 Par Value
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(Title of Class of Securities)
442120101
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(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 22, 2006
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(Date of Event which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 5 Pages)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 442120101 SCHEDULE 13D PAGE 2 OF 5 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
JANA PARTNERS LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
3,733,600
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 3,733,600
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,733,600
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.8%
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14 TYPE OF REPORTING PERSON*
IA
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 442120101 SCHEDULE 13D PAGE 3 OF 5 PAGES
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The Schedule 13D filed on February 21, 2006 by Jana Partners LLC, a
Delaware limited liability company (the "Reporting Person"), relating to the
shares ("Shares") of common stock, $0.01 par value, of The Houston Exploration
Company (the "Issuer"), as previously amended by Amendment No. 1 to the Schedule
13D filed on April 17, 2006, Amendment No. 2 to the Schedule 13D filed on April
24, 2006, Amendment No. 3 to the Schedule 13D filed on April 28, 2006, Amendment
No. 4 to the Schedule 13D filed on May 3, 2006, Amendment No. 5 to the Schedule
13D filed on May 16, 2006, Amendment No. 6 to the Schedule 13D filed on June 2,
2006, Amendment No. 7 to the Schedule 13D filed on June 7, 2006 and Amendment
No. 8 to the Schedule 13D filed on June 12, 2006, is hereby further amended as
set forth below by this Amendment No. 9 to the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended and restated as follows:
As of the date of this filing, the Reporting Person may be deemed the
beneficial owner of 3,733,600 Shares. The aggregate purchase price of the Shares
owned beneficially by the Reporting Person is approximately $210,847,516. Such
Shares were acquired with investment funds in accounts under management.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by the addition of the
following:
On June 22, 2006, the Reporting Person sent a letter to the Issuer
following up on its previously stated offer to purchase the Issuer for $62 per
share in cash and additionally offering to enter into a standstill and
confidentiality agreement with the Issuer in exchange for being allowed to begin
immediate due diligence, which the Reporting Person noted may cause it to
increase its offer price. The Reporting Person noted in the letter that over ten
days have passed since its offer was made and additionally informed the Issuer
of the Reporting Person's belief that it would evidence bad faith and a
disregard for its duties were the Issuer's Board of Directors to use this period
to pursue the type of acquisitions which the Reporting Person has previously
stated will generate less value for shareholders than other alternatives. A copy
of the press release with this letter is attached hereto as Exhibit K and is
incorporated herein by reference. A copy of the proposed draft standstill and
confidentiality agreement is attached hereto as Exhibit L and is incorporated
herein by reference.
Additionally, on June 22, 2006, on behalf of the Reporting Person,
the Reporting Person's counsel sent a letter to the Issuer's counsel noting that
most of the books and records requested under Delaware law by the Reporting
Person (the "Demand"), particularly those relating to what the Reporting Person
believes is the failure of the Issuer's Board of Directors to pursue maximum
value for shareholders, have not yet been provided to the Reporting Person, and
reiterating the Reporting Person's demand such books and records. The Reporting
Person also requested that if the Issuer's counsel believes that any of the list
of objections it has cited to the Reporting Person's books and records request
apply specifically to a particular request, the Issuer's counsel so specify so
that such claims can be evaluated. The Reporting Person's counsel also noted the
Reporting Person's belief that the following questions were raised by the
Issuer's counsel's initial response to the books and records request: (1) Why
did the Issuer state in its 10-K for fiscal 2005 that it maintains an office in
Alabama when, as it has now informed the Reporting Person, this office is paid
for by the Reporting Person's Chairman and CEO personally? (2) Because the
Issuer's counsel stated in its response to the Demand that Mr. Hargett pays
personally for all non-business related travel, yet did not state whether travel
to the Alabama "office" is considered non-business travel, the Reporting Person
would like clarification as to how this travel is classified. (3) The Issuer's
counsel stated in its response to
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CUSIP NO. 442120101 SCHEDULE 13D PAGE 4 OF 5 PAGES
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the Demand that the payments made pursuant to the overriding royalty interests
given to certain employees of the Issuer have been fully disclosed, yet no
recent disclosure regarding the amount of such payments made to former
employees, including former CEO James Floyd, appears to have been made, and
therefore the Reporting Person has requested that such information be made
available. A copy of the letter to the Issuer's counsel is attached hereto
as Exhibit M and is incorporated herein by reference.
Item 5. Interest in Securities of the Company.
Paragraphs (a), (b) and (c) of Item 5 of the Schedule 13D are hereby
amended and restated as follows:
(a) The aggregate percentage of Shares reported to be beneficially
owned by the Reporting Person is based upon 29,092,280 Shares outstanding, which
is the total number of Shares outstanding as of May 9, 2006 as reported in the
Issuer's quarterly report for the quarter ended March 31, 2006.
As of the close of business on June 21, 2006, the Reporting Person may
be deemed to beneficially own 3,733,600 Shares constituting approximately 12.8%
of the Shares outstanding.
(b) The Reporting Person has sole voting and dispositive powers over
the 3,733,600 Shares reported herein, which powers are exercised by the
Principals.
(c) The following transactions in the Shares were effected by the
Reporting Person since the most recent filing of Schedule 13D. All of the
transactions in the Shares were effected in open market purchases on the NYSE
through various brokerage entities.
Date of Shares Purchased Price Per
Transaction (Sold) Share ($)
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6/15/2006 75,000 $57.23
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6/16/2006 75,000 $56.83
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Item 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Schedule 13D is hereby amended by the addition of the
following:
11. Exhibit K - Press release with letter to the Issuer, dated June 22, 2006.
12. Exhibit L - Draft standstill and confidentiality agreement.
13. Exhibit M - Letter to the Issuer's counsel, dated June 22, 2006.
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CUSIP NO. 442120101 SCHEDULE 13D PAGE 5 OF 5 PAGES
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 22, 2006
JANA PARTNERS LLC
BY: /s/ Barry Rosenstein
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Name: Barry Rosenstein
Title: Managing Partner
BY: /s/ Gary Claar
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Name: Gary Claar
Title: Managing Director