|To: John Patterson who wrote (122)||1/6/1999 6:55:00 PM|
|From: FranW||Read Replies (1) | Respond to of 172|
Another acquisition ???|
Houston, Jan. 4 (Bloomberg) -- Pool Energy Services Co., an oilfield services company, began talks with Nabors Industries Inc., the largest U.S. driller of land-based oil and natural gas- wells, about the $453 million takeover offer Pool previously rejected as inadequate.
The news comes little more than a week before Pool shareholders are to vote on a Nabors-backed resolution recommending that Pool be sold at the highest available price. Pool had refused to discuss the Nabors bid, saying it was tantamount to a ''fire sale'' because oil prices near 12-year lows have pushed down industry shares.
Pool's bankers from Morgan Stanley told Nabors's bankers at Merrill Lynch that the company reversed itself and is willing to talk about a possible takeover, said Nabors Chief Executive Eugene Isenberg. Pool most likely changed its mind after talking to shareholders and finding many in favor of the resolution, said Fred Mutalibov, a Southwest Securities Inc. analyst.
''They saw they were going to be pushed that way anyway and said, 'Why not do it right away?' '' said Mutalibov, who has an ''accumulate'' rating on Pool shares.
If combined, the Houston-based companies could save as much as $14 million a year by closing administrative offices in places where their businesses overlap, such as Alaska, Mutalibov said. Such cost-cutting is necessary with oil prices so low, he said.
Nabors still expects to proceed with a resolution vote Jan. 12 unless an agreement can be reached beforehand, said Isenberg, adding that no substantive negotiations have taken place.
''They expressed a willingness to negotiate,'' Isenberg said. ''I welcome it.''
In a statement, Nabors said no agreement was reached in preliminary conversations over the weekend and no further discussions were scheduled. George Gaspar, a Robert W. Baird & Co. analyst, said Nabors's statement downplaying the talks was a way of ''keeping the pressure on Pool'' to begin serious negotiations. Gaspar has an ''accumulate-buy'' rating on Nabors shares.
Dennis Smith, a Nabors spokesman, declined to comment on whether the vote forced Pool to act. Pool officials couldn't be reached. In a statement, Pool said it didn't expect to comment on the discussions until an agreement is signed or the talks end.
Nabors in October offered 0.481 shares and $6.125 in cash for each Pool share and said it would assume about $178 million in debt. Nabors operates oil rigs in many of the same areas as Pool and expects the transaction will help it save money.