Tue, Sep. 22, 2:45 PM
- Weatherford's (WFT +9.7%) cancellation of its plans to raise $1B in a stock and debt offering is good news for the company, Jefferies analyst Brad Handler says as he reaffirms his Buy rating on the stock.
- The analyst says "the 'on paper' benefit of adding drill bits and upgrading Weatherford's directional drilling capabilities/platform, and that Weatherford's global footprint points to meaningful synergies... yet more important for us was the risk of further dilution for equity holders."
- The money could have been used to buy assets from Halliburton (HAL +0.2%) as it tries to acquire Baker Hughes (BHI -0.6%); WFT's apparent withdrawal means that GE (GE -0.2%) could be the only player left that can afford the assets.
- But the conflicting announcements from WFT are a "blow to management credibility," analysts at Tudor Pickering say.
Mon, Sep. 21, 11:39 AM
- Weatherford's (WFT -9%) plan to raise $1B fuels speculation that the company is gearing up for an acquisition, possibly a piece of the asset sales Halliburton (HAL +0.9%) needs to gain regulatory approval for its proposed $35B buyout of Baker Hughes (BHI +2.4%).
- WFT’s announcement “lends credibility” to the mounting speculation that HAL soon may unveil a buyer for the first two of its required divestitures, some analysts say.
- The deal spread on the HAL-BHI transaction currently stands at ~14% as concerns remain as to whether necessary asset sales can be completed and the transaction can be closed.
Wed, Sep. 16, 5:18 PM
- Cowen analyst James Crandell thinks the current down cycle in oil is "the worst ever" in terms of magnitude of the decline in exploration and production spending and thus in its impact on oil services companies (NYSEARCA:OIH); unlike past cycles, Crandell says there is a growing realization that a strong recovery in oil prices is not likely.
- Crandall estimates that when all is said and done, the 2015-16 down cycle will see a decline in global E&P spending of 35%-40%, with a drop internationally of 30% and in North America of 50%.
- The analyst cuts his price target on Baker Hughes (NYSE:BHI) to $56 from $61, Halliburton (NYSE:HAL) to $38 from $40, and Schlumberge (NYSE:SLB) to $90 from $100, but raises his target on Cameron International (NYSE:CAM) to $65 from $51.
Mon, Sep. 14, 5:15 PM
- GE has made offers in recent weeks for parts of the drilling services and drilling bits businesses Halliburton (NYSE:HAL) is selling to win regulatory approval to buy Baker Hughes (NYSE:BHI), Bloomberg reports.
- Weatherford (NYSE:WFT) and Nabors Industries (NYSE:NBR) also are bidding for the services entity, which is part of HAL's Sperry Drilling arm, according to the report; a number of P-E firms and industrial companies also are said to be bidding for the businesses.
- HAL said last week it was selling the units separately and considering bids from “a variety of interested parties” after the NY Post reported the Justice Department could force it to sell the assets to a single buyer.
- Final offers for both units are due within four weeks, Bloomberg says.
Fri, Sep. 11, 8:12 AM
- Halliburton (NYSE:HAL) -1.2% premarket following a NY Post article that says the Justice Department wants it to find a single buyer for ~$7.5B of assets instead of selling them to different suitors in order to gain approval of the company's proposed purchase of Baker Hughes (NYSE:BHI).
- DoJ’s single-buyer mandate leaves HAL with few options other than selling the package of assets to the likes of GE or Siemens (OTCPK:SIEGY), according to the report; it is not known if either company is willing to pay a reasonable price for the assets.
Fri, Sep. 4, 12:23 PM
- Sclumberger’s (NYSE:SLB) purchase of Cameron International (NYSE:CAM) should easily close, with optimism growing that Halliburton's (NYSE:HAL) bid for Baker Hughes (NYSE:BHI) also will close, and the deals mean more oil company M&A is on the way, FBR Capital analyst Thomas Curran believes.
- The wave of heavyweight deals likely is not over yet, Curran says, seeing Weatherford (NYSE:WFT) as the highest probability takeout with the broadest set of plausible strategic suitors; National Oilwell Varco (NYSE:NOV) is viewed as having a high likelihood of entering into a big deal, although probably as an acquirer, and FMC Tech (NYSE:FTI) could puruse a full combination with Technip, its 50/50% JV partner in Forsys Subsea.
Fri, Aug. 28, 11:29 AM
- Traders willing to bet Halliburton's (HAL +1.4%) proposed deal for Baker Hughes (BHI +1.2%) can survive regulatory scrutiny stand to amass more than $3B in profit, and Schlumberger’s (SLB +1.9%) purchase of Cameron International (CAM +1.7%) could help their chances, according to a Bloomberg analysis.
- With SLB - already the world’s largest oilfield-services provider - getting even bigger, HAL and BHI could have a better argument that they need to merge to get stronger, and the deal could provide more incentive for contractors to bid on HAL and BHI assets as they seek to stay competitive; HAL and BHI have committed to divest as much as $7.5B in assets, and several buyers appear to be interested.
- HAL shares stand to drop sharply without a deal, it would not have the merger’s cost-cutting opportunities to shield it from the slump in oil prices and shrinking revenue, and it would have to pay a $3.5B breakup fee if the deal fails to gain regulatory approval.
Wed, Aug. 26, 3:25 PM
- Analysts say Schlumberger’s (SLB -4.2%) acquisition of Cameron International (CAM +41.7%) is not particularly surprising, given SLB's two years of experience working alongside CAM through their OneSubsea joint venture and track record of soaking up JV partners.
- The combination effectively allows the two companies to extract the type of cost savings found at OneSubsea across the rest of their businesses; SLB thinks it can find pretax benefits of $600M in the second year after the deal, most of which will come from cost-cutting.
- Citigroup says the deal will firmly establish SLB as the dominant and most diversified oilfield service provider, with total estimated revenues for the combined entity of $46B in 2015, a figure the prospective Halliburton (HAL +2.3%) and Baker Hughes (BHI +2.5%) combo cannot match.
- SLB is making a strategic bet on a recovery in deepwater drilling, even if not in 2016, Tudor Pickering says; with 7M-plus bbl/day of global oil production coming from deepwater reservoirs, it makes sense that offshore activity eventually will rebound.
- The deal is not likely to touch off an M&A wave in the oilfield services industry because the global crude slump has strained the finances of many companies, leaving few able to make such a move, says Edward Jones analyst Rob Desai.
- But several potential acquisition targets in the services industry are higher: OII +8.3%, DRQ +7.4%, FTI +6.5%, NOV +4.1%, FET +3%.
Tue, Aug. 25, 6:29 PM
- The global market selloff and plunging oil prices have increased fears that some of this year’s largest takeover deals are at risk of falling apart, including Royal Dutch Shell’s (RDS.A, RDS.B) ~$70B offer for BG Group (OTCPK:BRGXF, OTCQX:BRGYY), Financial Times reports.
- Over the past week, the gap between the agreed price of several takeovers and the market price of the target companies’ shares has widened, which usually is interpreted as a signal of declining confidence that the transaction will complete as planned.
- Bets on the outcome of Shell’s deal represented the biggest trades being made by so-called event-driven hedge funds in Europe, at least one broker tells FT.
- Another deal spread to reach its widest level this week was that between Halliburton’s (NYSE:HAL) $35B offer for Baker Hughes (NYSE:BHI) and the target group’s market value.
Thu, Aug. 13, 7:27 PM
- Oil companies are bracing for "lower for longer” prices as a global supply glut persists, dragging U.S. crude to the lowest close since March 2009 at just above $42/bbl.
- More capitulation notes are out; Oppenheimer's Fadel Gheit wrote today that the "new normal" for oil in a recovery would be $65-$75, and that "the vast majority of oil companies are living beyond their means, with operating cash flow falling short of capital investments and dividend... Unless oil prices rebound significantly above future strip prices, oil stocks could sink further, as takeover premiums shrink with potential sellers significantly outnumbering potential buyers."
- The world’s biggest producers will need to trim investments by another $26B, Jefferies believes; capital spending will have to fall 10% next year, according to Banco Santander.
- CNBC's Bob Pisani says when energy stocks staged a brief bounce recently, investors repeated a frequent mistake: They tried to buy oil stocks ahead of a recovery in crude oil, instead of the other way around.
- The result today was heavy losses for many of the sector's big names: CHK -6.6%, MRO -5.4%, COP -2.8%, APC -2.4%, SWN -4.2%, RRC -4.4%, RIG -6.5%, DVN -3.9%, APA -2.6%, BHI -2.9%, CAM -3.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXI, FIF, PXJ, NDP, RYE, FXN, DDG
Mon, Aug. 10, 4:48 PM
- A group of companies that say they are owed millions from Miller Energy’s (NYSE:MILL) Alaska subsidiary is trying to push the unit into bankruptcy after the SEC last week charged the company with accounting fraud.
- Creditors of MILL’s Cook Inlet Energy subsidiary including Baker Hughes (NYSE:BHI) and Schlumberger (NYSE:SLB) filed an involuntary chapter 11 petition last Thursday against MILL in U.S. Bankruptcy Court in Anchorage, claiming the Alaska subsidiary owes them ~$2.8M.
- MILL plans to fight the request and restructure its debt without bankruptcy, CEO Carl Giesler tells WSJ, and is attempting to convince BHI and SLB to pull the petition.
Mon, Aug. 3, 3:16 AM
- Although it still looks shaky, Halliburton (NYSE:HAL) has received a request from the European Commission for additional information about its proposed $35B merger with rival Baker Hughes (NYSE:BHI).
- Halliburton has also responded to a second request made by U.S. antitrust officials considering whether to approve the merger.
- Should the deal go through, the combined company would overtake Schlumberger as the world's No. 1 oilfield services provider.
- Previously: Report: Halliburton facing antitrust scrutiny in planned Baker Hughes deal (Jul. 22 2015)
Mon, Jul. 27, 10:18 AM
- Halliburton (HAL -1.5%) disclosed after last Friday's close it has cut nearly 14K jobs and Baker Hughes (BHI -1%) has laid off 13K employees since they began trimming their headcounts last year, several thousand more jobs than the companies had anticipated in April.
- HAL's latest layoff estimate exceeds its April figure by 5K jobs, bringing its cuts up to 16% of its workforce from its peak of more than 80K last year, while BHI's estimate is up by 2.5K jobs, up to 21% of its headcount of 62K at the end of last year.
- The world’s top four oilfield service companies - HAL, BHI, Schlumberger (SLB -0.7%) and Weatherford (WFT -1.3%) - have either cut or plan to cut 58K jobs this year in response to the collapse of crude prices.
Thu, Jul. 23, 12:02 PM
Thu, Jul. 23, 8:42 AM
- Analysts at Morgan Stanley and Deutsche Bank largely dismiss yesterday's report on antitrust hurdles in Halliburton's (NYSE:HAL) proposed takeover of Baker Hughes (NYSE:BHI) as mostly noise.
- Morgan Stanley analyst Ole Slorer says he spoke with an antitrust expert and concludes the article merely summarized well known facts, saying HAL's "exceptionally diligent" handling of the transaction has minimized risks.
- Deutsche Bank's Mike Urban says issues raised in the article have been a "widespread investor concern for the past couple of months," and continues to believe the deal ultimately will close.
- Slanley raises HAL's price target to $62 from $60 and BHI to $88 from $86, maintaining Overweight ratings on both stocks; Deutsche Bank keeps a Buy rating on HAL with a $68 price target.
Wed, Jul. 22, 12:51 PM
- Halliburton’s (HAL -3.2%) takeover of Baker Hughes (BHI -7.6%) is facing resistance from U.S. Justice Department officials who are concerned the deal could hurt competition, Bloomberg reports, sending shares tumbling.
- Although HAL has proposed selling some assets to other companies, antitrust enforcers reportedly are not convinced its plan would restore sufficient competition.
- The DoJ's antitrust division is positioned to carry out a legal challenge if it decides to try to halt the deal, and has assigned veteran litigator John Read to oversee the review, according to the report.
Baker Hughes Inc operates in the oilfield services industry. It provides products and services for drilling and evaluation of oil and gas wells, completion and production of oil and gas wells, fluids and chemicals and reservoir technology.
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