"The merger with Grey Wolf is a perfect strategic fit for both companies," Precision Drilling chief executive Kevin Neveu said in a statement. Grey Wolf's shares are seen as less attractive now because natural gas prices have fallen nearly 40 per cent from their peak at the beginning of July.
At that level, the deal is worth about $8.80 US per share of Grey Wolf, less than the $10 US a share of Precision's previous offer, but with a higher cash percentage. Precision's units fell 99 cents or 4.5 per cent to $21.24 in Toronto trading on Monday. Precision Drilling will pay $1.12 billion US in cash and 42 million of its units to acquire Grey Wolf, which owns 121 drilling rigs in the United States - 10 times more than Precision currently operates there. The two companies announced early Monday that their boards of directors had agreed to the deal.
for nearly $2 billion in cash and equity. Fourth time's the charm for Canada's biggest oil and gas services firm.Īfter 2½ months of making successively sweeter takeover offers that were rebuffed one after the other, Calgary-based Precision Drilling Trust has finally reached a deal to buy Houston-based Grey Wolf Inc.
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