Precision Drilling to buy Trinidad Drilling in friendly $1B deal

CALGARY -- Trinidad Drilling Ltd. shares rose to their highest level in nearly six months on Friday after Precision Drilling Corp. came to its rescue with a friendly takeover offer valued at $1.03 billion, including assumed debt.

Trinidad's shares, which had plunged during the summer prior to a hostile takeover offer from Ensign Energy Services Inc. in August, gained 12 cents or 6.5 per cent to $1.96, shortly after the Toronto Stock Exchange opened.

Precision Drilling shares were at $4.40, down four cents from Thursday's close, and Ensign's fell five per cent or 29 cents to $6.06 per share.

Under a friendly deal announced before markets opened, Trinidad shareholders would receive 0.445 of a Precision Drilling share for each share and collectively own 29 per cent of Precision's common equity. Precision would also assume $477 million in debt.

Based on $4.40 per share as of early Friday, the offer would be worth about $1.96 per Trinidad share -- although the value will fluctuate until the deal closes. The offer was worth $1.98 per share based on Thursday's closing price.

Ensign's offer of $1.68 cash, announced on Aug. 30, was previously rejected by Trinidad's board

A combined Precision-Trinidad would have more than 200 active rigs in its North American fleet after the transaction, and 322 total rigs. Of those, Precision has identified 50 that would be held for sale.

It projects more than $30 million in annual synergies from the combination, through improved corporate efficiency and facility consolidations.

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