ERC Another one bites the dust. What? Not much premium..?
Enserco Energy board agrees to Nabors acquisition offer
Enserco Energy Service Company Inc ERC
Shares issued 26,484,600 Feb 25 2002 close $14.810
Tuesday Feb 26 2002 News Release
Mr. Kerklan Hilton reports
NABORS INDUSTRIES ENTERS INTO AGREEMENTS TO ACQUIRE ENSERCO
Nabors Industries, Inc. and Enserco Energy Service Company have entered into an acquisition agreement pursuant to which Nabors will offer $15.50 (Canadian) (plus interest from today to the date of the completion of the transaction at an annual rate of 6 per cent) for each Enserco common share. Enserco shareholders will also have the option to elect to receive the equivalent value in shares of a Canadian subsidiary of Nabors that will be exchangeable for Nabors common stock. The transaction is proposed to be effected by way of a plan of arrangement.
Under the terms of the agreement, the number of shares of the Canadian subsidiary to be received for each Enserco common share will take into account the interest component of the cash offer price and will be determined based on the weighted average trading price of the Nabors common stock on the American Stock Exchange for the 10 consecutive trading days ending on the third business day prior to the date of the meeting of Enserco shareholders that will be held to approve the acquisition. The shares of the Canadian subsidiary of Nabors: (i) will have the same voting rights, dividend entitlements and other attributes as Nabors common stock; (ii) will be exchangeable, at each shareholder's option, on a one-for-one basis, into Nabors common stock; and (iii) subject to compliance with the listing requirements of the Toronto Stock Exchange, will be listed on the TSE. Those shares will automatically be exchanged five years from closing, and in certain other events.
The number of shares of the Canadian subsidiary of Nabors to be issued for each Enserco common share, pursuant to the formula described above, will be announced prior to the Enserco shareholder meeting.
Gene Isenberg, Nabors's chairman and chief executive officer, commented on the acquisition: "We are very pleased to be able to increase our position in Canada with such a well-regarded entity. Enserco's assets are relatively new, in excellent condition and well-suited for the increasingly important role that Canada is playing in the North American natural gas supply picture. Enserco has one of the industry's best safety records, which I firmly believe is the most direct indication of the quality of an operation, its people and its management.
"Nabors's business in Canada spans 50 years and our willingness to invest there has increased for several reasons. In the last few years, many of the company's key U.S. customers have substantially increased their presence in Canada, as it has become even more strategic to the North American gas supply. Federal and provincial initiatives to reduce corporate tax rates have also increased Canada's attractiveness as an investment for Nabors."
The acquisition agreement has been unanimously approved by the board of directors of Enserco, and will require approval by at least 66-2/3 per cent of the Enserco shareholders who vote at the meeting to be held for that purpose. The board of directors of Enserco has received an opinion from its financial adviser, Peters & Co. Limited, that the offer is fair, from a financial point of view, to the Enserco shareholders. The agreement contains customary non-solicitation provisions and a termination fee payable by Enserco of $17-million (Canadian) under certain circumstances. Nabors also retains the right to match competitive proposals should they arise.
Nabors has also agreed to acquire from two parties, prior to the completion of the acquisition, Enserco common shares representing approximately 20.5 per cent of the total number of issued and outstanding Enserco common shares, subject to certain conditions, for $15.50 (Canadian) per Enserco common share. In addition, certain shareholders and optionholders of Enserco who own or control a total of 3,748,795 Enserco common shares and options to acquire a total of 511,240 Enserco common shares have agreed, subject to the terms and conditions of those agreements, to vote their Enserco common shares (including Enserco common shares acquired on the exercise of such options) in favour of the Nabors acquisition.
As a result of the purchase agreements and the lock-up agreements, Nabors may be considered to have acquired ownership of, or control or direction over, a total of 9,626,907 common shares of Enserco (including a total of 511,240 common shares of Enserco subject to options), which Nabors believes constitutes approximately 36 per cent of the outstanding common shares of Enserco after giving effect to the exercise of the options.
Peters & Co. Limited is acting as financial adviser to Enserco in this transaction.
Before giving effect to this transaction, the Nabors companies own and operate over 500 land drilling and 740 land workover and well-servicing rigs worldwide, including 52 in Canada. Offshore, Nabors operates 43 platform rigs, 16 jack-ups, and three barge rigs in the Gulf of Mexico and international markets. These rigs provide drilling, workover and well-servicing services. Nabors also operates 30 marine transportation and support vessels in the Gulf of Mexico. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oil field hauling, engineering, civil construction, logistics and facilities maintenance, and project management services. Nabors participates in most of the significant oil, gas and geothermal markets in the world.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
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