Expro defends keeping out Halliburton
23 Jun 2008
Expro International Group plc today defended its decision to accept a 10-pence lower bid from the Umbrellastream consortium comprising private equity firm Candover, investment bank Goldman Sachs Capital Partners and Alpinvest, instead of the improved 1,625 per pence bid from from the world's second-biggest oil services company Halliburton.
Halliburton had yesterday said that it was ending its bid, riased on 20 June to 1,625, to acquire its UK rival for its refusal to agree to an auction and instead opting for the 1,615 per share cash offer amounting to $3.5-billion cash offer from Umbrellastream. Expro's independent directors recommended the Umbrellastream offer with court hearings due today and Wednesday, June 25 to get the offer approved and settlement of the scheme of arrangement takeover due on 10 July.
Umbrellastream had offered 1,435 pence for Expro in April, raising it twice preemptively to fend off Halliburton, which had made its interest public shortly after that original takeover agreement. The final Umbrellastream offer represents a premium of 74 per cent to Expro's share price on 28 February, the day before the offer being announced.
Halliburton said since Expro did not consider the higher offer sufficient to open up an auction, it ended talks but reserved the right to make an offer in certain circumstances, including if the rival offer was not sanctioned or if there were a delay.
A group of institutional investors said Halliburton's higher offer should have been considered and said that they would try to block the takeover by Umbrellastream.
Defening its decision to recommend the lower offer, Expro said the Halliburton proposal was subject to a number of pre-conditions and the price did not compensate shareholders for the extra time they were required to wait for the payment. It said Halliburton had stopped short of making a firm offer 20 June and, instead, opted to make its improved offer subject to Expro agreeing to initiate a scheme of arrangement takeover by the US firm.
It also pointed out that its independent directors had earlier stressed that it was of critical importance for Halliburton's proposal take into account the delay in payment to Expro shareholders and execution risks associated with it.
The compny said that backing the Halliburton bid would have resulted in Expro shareholders ultimately receiving a lower value than the 1,615 pence offered to them by Umbrellastream and therefore opted not to delay the Umbrellastream court meetings scheduled for today and Wednesday or to convene alternative court and shareholder meetings to discuss Halliburton's new offer.