Stephen Simpson, CFA
Mon, Apr. 4, 8:53 AM
- Baker Hughes (NYSE:BHI) -2.2% premarket following a NY Post report that Halliburton (NYSE:HAL) is making a last-ditch bid to save their proposed merger but the Justice Department is leaning against it.
- The DoJ has not made a final decision on whether to file a lawsuit to block the deal, but it could announce its opposition as soon as this week's American Bar Association annual antitrust conference in Washington, according to the report.
- HAL is on the hook to pay a $3.5B break-up fee to BHI if the deal falls apart; BHI also could walk away from the deal at the end of April - and might do so - to collect the fee if the DoJ does not act by that time, the report says.
- Regulators reportedly have asked HAL to sell assets with ~$10B in revenue, which it is struggling to do after the collapse in oil prices; GE is said to be the only company willing to buy some of the assets, with Weatherford (NYSE:WFT) out of the bidding.
- Now read Halliburton and Baker Hughes: Is it time to cut losses?
Mon, Feb. 29, 9:54 AM
- The DoJ is pushing for Halliburton (HAL -0.9%) to agree to even more divestitures before it moves to approve the pending merger with Baker Hughes (BHI -1.9%), NY Post reports.
- HAL, which already has said it would sell assets that accounted for $7.5B in 2013 revenue, has reached a "breaking point," according to the report, which cites one source who predicts HAL would not be able to meet the DoJ's request.
- HAL is in a position of weakness, and potential buyers of its assets - speculation centers around GE (GE +0.3%) and Weatherford (WFT +0.9%) - are in a strong bargaining position, the report says.
Oct. 22, 2015, 12:26 PM
- Weatherford International (WFT +10.6%) will not try to buy assets divested by Halliburton (HAL +3.3%) and Baker Hughes (BHI +2.6%), CEO Bernard Duroc-Danner said in its earnings conference call today, putting to rest questions about its involvement in the bidding process.
- The CEO said WFT was interested in HAL’s Sperry Drilling business, which has been placed on the market as HAL and Baker Hughes seek regulatory approval for their $35B merger, but that while WFT believed that the economics of Sperry were strong, the company “could not get over the cost of capital."
- Instead of chasing divested assets, Duroc-Danner said WFT will continue to focus on making the business more efficient and focusing on its strengths.
- HAL said Monday it was making progress on marketing assets it has targeted for sale, and has entered the negotiation phase for the first slate of announced divestitures, including Sperry Drilling.
Sep. 21, 2015, 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.
Sep. 14, 2015, 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.
Sep. 4, 2015, 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.
Nov. 18, 2014, 6:48 PM
- Halliburton’s (NYSE:HAL) $34.6B buyout of Baker Hughes (NYSE:BHI) has caused HAL shares to plunge 12% since the deal was announced Monday, the worst two-day performance for an acquirer’s stock this year; on average, a company announcing a deal has seen its stock pop 3.1% on the news.
- But analysts say the deal may present game-changing opportunities for a few small and mid-cap oilfield services firms with enough cash on hand to buy a chunk of HAL's expected divestments without diluting their stock or damaging their credit rating.
- Tudor Pickering Holt's Jeff Tillery speculates that Forum Energy Technologies (NYSE:FET), National Oilwell Varco (NYSE:NOV) and GE would be interested in HAL's manufacturing businesses that may come up for bid, while Superior Energy Services (NYSE:SPN) and Frank's International (NYSE:FI) might want certain services-oriented businesses.
- Weatherford (NYSE:WFT) would seem like a logical buyer of some assets and could make it happen with a mix of cash and stock, but RBC's Kurt Hallead thinks HAL might not want to cooperate with a company that could essentially become what Baker Hughes was.
Jul. 14, 2014, 7:46 AM
- Rosneft (OTCMKTS:RNFTF) agrees to buy Weatherford International (NYSE:WFT) drilling and well-servicing assets in Russia and Venezuela for $500M, as Russia's top oil producer pushes to build its own drilling business to cut costs.
- Russia needs to increase its drilling to maintain its current output of ~10.5M bbl/day over the next decade; WFT accounts for ~3% of the Russian oilfield services market by revenue.
- The sale is part of WFT's plan to sell or split off as much as $1B in assets this year.
Apr. 9, 2013, 11:47 AM
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.| Apr. 9, 2013, 11:47 AM
Apr. 8, 2013, 3:19 PMGE'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. | Apr. 8, 2013, 3:19 PM
Apr. 8, 2013, 8:04 AM
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%.| Apr. 8, 2013, 8:04 AM | 3 Comments
Apr. 8, 2013, 2:00 AM
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).| Apr. 8, 2013, 2:00 AM
Dec. 5, 2012, 9:59 AM
Weatherford (WFT +3.5%) is attractive on fundamentals and as an acquisition candidate, Dahlman Rose writes. The firm believes WFT's core product lines, global presence and multinational tax structure would be attractive to a number of companies, and the current stock price could make WFT vulnerable to an unfriendly offer. HAL and GE could be interested.| Dec. 5, 2012, 9:59 AM