Precision Drilling Trust Responds to Determination of Grey Wolf's Board Not to Pursue Discussions
28 Juin 2008 - 2:28AM
Marketwired
CALGARY, ALBERTA announced today that it is deeply disappointed
that Grey Wolf, Inc. ("Grey Wolf") has rejected Precision's final
proposal for a business combination with Grey Wolf at US$10.00 per
share and that its Board has concluded that the pursuit of
discussions with Precision is not in the best interests of Grey
Wolf's shareholders.
As previously disclosed, Precision believes its proposal is
fully priced and fair to the Grey Wolf shareholders and provides a
superior alternative to a merger with Basic Energy Services, Inc.
("Basic"). This belief is based in part on the fact that, based on
2009 consensus earnings estimates and factoring in the fully
diluted impact of the Grey Wolf convertible notes, the Precision
offer implies a cash flow per share multiple of 7.9x, an earnings
per share multiple of 14.0x, an enterprise value to EBITDA of 5.5x
and an enterprise value per rig of US$16.1 million.
Precision is highly confident it can complete its due diligence
and satisfy the financing conditions in advance of the July 15
meeting of Grey Wolf shareholders, thereby making our offer subject
only to regulatory and shareholder approval. Precision believes
that Grey Wolf shareholders should be given the opportunity to vote
on Precision's proposal.
Notwithstanding Grey Wolf's Board's current position not to
engage in discussions with Precision, Precision awaits with
continued interest the outcome of Grey Wolf's meeting of
shareholders on July 15. Precision currently intends to re-approach
the Grey Wolf Board if the Merger Agreement with Basic is
terminated.
"We are disappointed that Grey Wolf's Board chose not to
investigate the alternative presented by Precision and we firmly
believe we would have addressed all the concerns publicly stated by
Grey Wolf as reasons to reject our proposal. We continue to believe
that our proposed combination of these two great companies
represents a compelling strategic opportunity which is in the best
interests of the securityholders of both companies. Precision
remains committed to its strategy of delivering its high
performance, high value energy services to the US market through
its organic growth plan and disciplined acquisitions", said Kevin
Neveu, Precision's Chief Executive Officer.
Precision is a leading provider of safe, high performance energy
services to the North American oil and gas industry. Precision
provides customers with access to an extensive fleet of contract
drilling rigs, service rigs, camps, snubbing units, wastewater
treatment units and rental equipment backed by a comprehensive mix
of technical support services and skilled, experienced
personnel.
Precision Drilling Trust is listed on the Toronto Stock Exchange
under the trading symbol "PD.UN" and on the New York Stock Exchange
under the trading symbol "PDS".
This press release contains statements that may constitute
"forward-looking information" or "forward-looking statements"
(collectively, "forward-looking information") within the meaning of
applicable securities legislation. This forward-looking information
includes, among others, statements regarding business strategy,
plans, earnings, cash flow and other expectations, beliefs, goals,
objectives, information and statements about possible future
events, including Precision's proposed business combination with
Grey Wolf. Readers are cautioned not to place undue reliance on
such forward-looking information. Forward-looking information is
based on current expectations, estimates and assumptions that
involve a number of risks, which could cause actual results to vary
and in some instances to differ materially from those anticipated
by Precision and described in the forward-looking information
contained in this press release.
Contacts: Precision Drilling Corporation, Administrator of The
Trust Kevin Neveu Chief Executive Officer (403) 716-4500 (403)
264-0251 (FAX) Precision Drilling Corporation, Administrator of The
Trust Doug Strong Chief Financial Officer (403) 716-4500 (403)
264-0251 (FAX) Precision Drilling Trust 4200, 150 - 6th Avenue
S.W., Calgary, Alberta T2P 3Y7 Website:
www.precisiondrilling.com
Precision Drilling (NYSE:PDS)
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