Venoco (VQ) Shares Pare Gain; SunTrust Cautious as Financing Could Be Difficult

After gapping nearly 45 percent higher amid news Venoco's (NYSE: VQ) Chairman and CEO Timothy Marquez offered to take the company private at $12.50 per share, traders are already lightening up on the buying as skepticism seems to be setting in.

While still sharply higher, Veneco shares are well off session highs. The stock last traded at $10.47, up more than 36 percent from Friday's closing price.

On the analyst front, SunTrust's Jason Wrangler questions the deal. He believes potential financing for the deal may be difficult given Veneco's high amount of debt and expected cash burn. The analyst notes Marquez would need around $365 million to buy the remaining stake, as well as an additional $100 million in order to finance 2012 capex.

Wrangler maintains a Neutral rating on shares of Veneco.

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