A special committee has cleared Lufkin Industries' (LUFK) board of accusations that it breached its fiduciary duties in the way it handled GE's (GE) $2.98B acquisition of the oilfield pump maker. Lufkin's board will now not pursue the allegations, which were made by two shareholders. Lufkin is due to hold a meeting today for investors to vote on the deal.
Investment banking advisory Evercore Partners (EVR) is replacing Lufkin Industries (LUFK) in the S&P SmallCap 600 after the close of trading on Monday, July 1. A subsidiary of S&P 100 & 500 constituent General Electric (GE) is acquiring LUFK in a deal expected to be completed soon. EVR +1% AH.
GE's nearly $3B acquisition of Lufkin Industries (LUFK) receives antitrust approval from the FTC. The companies hope to close the deal - which will sharply increase GE's presence in the shale industry - by June.
GE's planned purchase of pump maker Lufkin (LUFK) at the industry’s most expensive price tag highlights demand for oilfield equipment that may spark takeover interest from large-cap oilfield servicers for Weatherford (WFT), Flotek (FTK) and Tesco (TESO), Bloomberg writes. Even after WFT surged yesterday on the Lufkin news, its $18B enterprise value still equals just 7.3x trailing 12-month EBITDA.
Also enjoying a boost from GE's purchase of Lufkin (LUFK) are small- and mid-cap makers of drilling and production equipment for use in deepwater and other harsh environments. GE has paid "strikingly high multiples relative to the risks," Wells Fargo says, possibly sparking an upward revaluation" of names such as Dril-Quip (DRQ +1.7%), Dresser-Rand (DRC +3.5%) and Oceaneering (OII +2.6%).
GE's "stunning" $3.3B purchase price for Lufkin (LUFK +37.5%) means Weatherford's (WFT +3.5%) similar business could be worth even more, given its size and global scale, Cowen says. Credit Suisse says the deal reflects the increasing importance of artificial-lift technology as firms pursue oil using unconventional methods. Dover (DOV +1.5%), a third company in the sector, also is up.
Lufkin Industries (LUFK) zooms 37% higher to $87.78, just under GE's (GE +0.4%) acquisition offer of $88.50/share, which represents a 38% premium to Lufkin's close on Friday. "GE (is) putting together (a) soup to nuts oil service company now because of U.S. drilling," Jim Cramer tweets. Shares in Lufkin's main rival, Weatherford International (WFT), +4.15%.
General Electric (GE) is reportedly closing in on a deal to acquire Lufkin Industries (LUFK), a provider of pumps and other equipment to the oil and gas industry. There's no word on price, although Lufkin has a market cap of $2.15B. While the company's shares are sure to attract attention, also on watch are those of rival Weatherford International (WFT).
Lufkin Industries (LUFK +6.3%) shrugs off weak Q1 guidance after its Q4 easily beats across the board. Total revenue rose 27% Y/Y, bouyed by a record year-end backlog of $324M, up 19% year over year. Q1 looks challenging however, as the company faces a back-loaded FY. For the current quarter, it's looking for an EPS of $0.40 - 0.50, versus Street estimates of $0.80. Sales are expected to be around $295M - 305M, below the $330M consensus estimate.
$LUFK didn't blow up again, but its guidance was muted
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Lufkin Industries, Inc. (the “Company”) was incorporated under the laws of the State of Texas on March 4, 1902, and since that date has maintained its principal office and manufacturing facilities in Lufkin, Texas. The Company employed approximately 2,600 people at December 31, 2009, including...More