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

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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.

But for a lot less than everybody originally planned. Precision’soriginal offer was worth $9.02 in cash or 0.4225 of a Precision commonunit. The final deal for common units went down at $2.98. That’s whythe choice of cash was oversubscribed. Grey Wolf shareholders will getsome pro-rated portion of $5 cash/share of Grey Wolf stock and 0.1883of a Precision common unit.

If Grey Wolf shareholders had approved a July agreement with BasicEnergy Services, Inc. (NYSE:BAS), they wouldhave received better than $7.00 per share. Precision’s share price is offnearly 5% this morning, trading at around $6.80/share.

Paul Ausick
December 23, 2008