Canadian oilfield services provider Ensign Energy Services (ESI) is planning to acquire Trinidad Drilling in a deal valued at C$947m ($720.26m) including debt, to strengthen its business.
Image: Ensign intends to strengthen its business with new the acquisition of Trinidad Drilling. Photo: Photo by rawpixel on Unsplash.
Through a wholly-owned subsidiary, the firm intends to make unsolicited take-over bid to acquire all of the issued and outstanding common shares of Trinidad Drilling for $1.68 in cash per common share plus the assumption of $477m in outstanding net debt.
Ensign, which currently owns a 9.8% stake in Trinidad, said it had approached Trinidad’s board of directors with an offer, following the latter’s unsuccessful public strategic review process.
The firm offered Trinidad with a proposal to enter into negotiations regarding a fully-funded all-cash transaction.
Ensign said that its fully funded all-cash offer will provide Trinidad with immediate liquidity and certainty of value to Trinidad shareholders.
The Canadian firm said in a statement: “Following our approach to the Trinidad board, the Trinidad board offered to engage in discussions with us, however these discussions were to be subject to the terms of a confidentiality agreement which contained a lengthy standstill provision.”
“The Trinidad board’s failure to fully engage with Ensign has led us to bring the Offer directly to you, the shareholders and true owners of the company.
“However, unless the Trinidad board agrees to shorten the bid period to as little as 35 days, the offer must remain open for at least 105 days.”
Since the start of strategic review in February 2018, Trinidad said it has assessed a number of alternatives and including a sale of select assets and a corporate transaction.
Announcing the results of the strategic review, the firm said in a statement: “The Board has determined that the best alternative to improve shareholder value is to pursue Trinidad’s revised five-year strategic plan, capitalizing on the Company’s operational excellence, strong customer base, geographic diversity and solid financial position.”
Ensign provides oil-field services which include contract drilling, directional drilling, underbalanced and managed pressure drilling, rental equipment, well servicing and production services.
Canada-based Trinidad Drilling operates in the drilling and well servicing sectors of the North American oil and gas industry.