Posts for Ticker ‘GW’

Grey Wolf Nearly, Finally Merged (GW, PDS, BAS)

The shareholders of Grey Wolf, Inc. (NYSE:GW) have overwhelmingly chosen to accept cash instead of stock in Precision Drilling Trust (NYSE:PDS) as consideration for Precision’s buyout of Grey Wolf. We’ve been following the story for some months now, but Grey Wolf shareholders approved the merger this morning and the deed is now done.

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Posted on: December 23, 2008 – 11:28 am in Mergers and Buy Outs, Oil & Gas, , ,

Precision Drilling: The Grey Wolf Saga Continues (PDS, GW)

Precision_drilling_imageThe merger between Precision Drilling (NYSE:PDS) and Grey Wolf (NYSE:GW) could turn into the longest running soap opera on Wall Street. Our story last month summed up the action so far.  Last night, Precision announced that the shareholders’ meeting was beingmoved to December 23rd, and that the merger terms were being amended.So far, only 54% of Grey Wolf shares have approved the deal, and theshareholder meeting was scheduled for December 9th.

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Posted on: December 3, 2008 – 10:48 am in Mergers and Buy Outs, Oil & Gas, ,

Will Grey Wolf and Precision Drilling Finally Tie the Knot? (GW, PDS, BAS)

Oil_well_logo_2The buyout of US driller Grey Wolf (NYSE:GW) by Canadian drilling company Precision Drilling Trust (NYSE:PDS) got its start back in April, when oilfield services company Basic Energy Services (NYSE:BAS) made an offer to buy Grey Wolf. While Grey Wolf shareholders were considering that offer, Precision Drilling made an unsolicited bid for Grey Wolf that eventually topped out at $10/share.

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Posted on: November 17, 2008 – 9:02 am in Mergers and Buy Outs, Oil & Gas, , ,

Top Early-Bird Analyst Upgrades & Downgrades (COMV, CRM, V, BRCM, GW, IDTI, MRVL, QELP, STI)

These are some of the top analyst calls we are seeing this Tuesday morning:

  • Comverge (COMV) started as Buy at Jefferies.
  • Salesforce.com (CRM) Raised to Buy at Citigroup.
  • Visa (V) started as Outperform at William Blair.

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Posted on: August 26, 2008 – 6:34 am in Analyst Calls, , , , , , , , ,

Grey Wolf Finally Gets its Wish, Sort Of (GW, PDS, BAS)

Oil_well_logo_2The board of directors of Grey Wolf, Inc. (AMEX:GW) has been trying to sell the company for at least a couple of months at a higher price. Today, they appear to have gotten their wish. Sort of.  Canada’s Precision Drilling Trust (NYSE:PDS) and Grey Wolf have announced a definitive agreement under which Precision will acquire Grey Wolf for $5/share in cash and 0.1883 new units in Precision for each share of Grey Wolf. That comes to $1.12 billion in cash and 42 million units, worth about another $897 million.  In other words, $9.02 before any dilution and before the 7% "PDS" drop today.

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Posted on: August 25, 2008 – 10:05 am in Mergers and Buy Outs, Oil & Gas, , ,

Basic Energy Reports on June Operations; Gets Flak/Props on Grey Wolf Merger (BAS, GW, PDS, RMG)

Oilfield services company Basic Energy Services (NYSE:BAS) released its June operations report this morning. The company has increased its rig count by one over May, and thirty since a year ago. Rig utilization stands at 79%, and drilling utilization is down a few points from May, but up from 63% to 83% over June 2007. These are solid numbers, and the company’s president and CEO expects improvements in pricing to offset higher fuel and labor costs.

The interesting news is behind the numbers (as usual). In April, Basic announced a "merger of equals" with Grey Wolf (NYSE:GW), a well driller. The surviving entity will retain the Grey Wolf name and NYSE ticker. Grey Wolf shareholders will receive $1.82 in cash plus one share of stock in the new company in exchange for four shares of existing Grey Wolf stock. Basic stockholders receive $6.70 in cash and 0.91975 shares of stock in the new company for each share of Basic stock. Then, in early June, Canada’s Precision Drilling Trust (NYSE:PDS) made an unsolicited offer of $9.00/share in cash and stock for Grey Wolf. Precision has bumped its offer twice, and it now stands at $10.00/share. Precision, like Grey Wolf, is a drilling company, and the conventional wisdom seems to be that the deal between Precision and Grey Wolf makes more sense than the Grey Wolf/Basic deal because there is little chance for cost-cutting in the Basic merger.

On Monday, RiskMetrics (NYSE:RMG) weighed in with a report questioning the Basic/Grey Wolf merger, and raising questions of conflict of interest on Grey Wolf’s Board. Yesterday, Egan-Jones Proxy Services recommended that Grey Wolf stockholders approve the Basic merger at the special meeting called for July 15th. Grey Wolf issued a press release citing Egan-Jones’ recommendation.

The combination of Precision Drilling and Grey Wolf yields a larger drilling company, but it’s hard to see how there will be significant cost savings. The Basic/Grey Wolf merger gives Grey Wolf some additional drilling capability, plus services such as completion, workovers, and abandonment. Strategically, the latter deal seems to position the merged company better, but it won’t pay off in a quarter or two. To some shareholders, that quick payoff trumps everything else.   

Paul Ausick
July 9, 2008

Posted on: July 9, 2008 – 10:08 am in Mergers and Buy Outs, Oil & Gas, , , ,