The offer represents a 26 percent premium over the closing price of NQL's common shares on the Toronto Stock Exchange on October 20, 2006 and a 37 percent premium to the volume weighted average trading price of NQL's common shares on the Toronto Stock Exchange for the 10 previous trading days ending October 20, 2006.
Mr. Kevin Nugent, President and Chief Executive Officer of NQL, commented, "NQL's Board of Directors has determined that the cash offer of C$7.60 per share represents fair value for the company's shareholders. The offer is a strong premium to recent share trading values."
Mr. Pete Miller, NOV's Chairman, President and CEO, said, "NQL brings great people, tools, technologies, and markets to our organization, and we are enthusiastic about what we can do together. We expect to enhance further NQL's already high service and support levels by providing it opportunities to grow through NOV's extensive international infrastructure." Miller added that NOV expects to combine NQL's business with its own leading downhole tools business in order to improve efficiency, enhance its growth prospects and achieve synergies of approximately C$10 million per year. NOV believes the acquisition will be accretive to its 2007 earnings.
Peters & Co. Limited is acting as financial advisor to NQL with respect to the transaction and has advised the Board of Directors of NQL that the consideration to be received under the offer is fair, from a financial point of view, to NQL shareholders.
The Board of Directors of NQL has agreed to unanimously recommend the offer and has concluded that the transaction is in the best interests of NQL and the NQL shareholders. In addition, the Board of Directors has unanimously resolved to recommend that all NQL shareholders tender their common shares to the NOV offer.
The pre-acquisition agreement provides that NQL will pay NOV a non-completion fee in certain circumstances if the transaction is not completed. NQL has agreed not to solicit further offers or initiate discussions or negotiations with any third party concerning the sale of NQL, subject to its ongoing fiduciary obligations and responsibilities.
In connection with NOV's offer, certain major shareholders and all of the directors and senior officers of NQL have entered into lock-up agreements with NOV pursuant to which they have agreed to tender all of their common shares to the offer, subject to certain exceptions, representing, in the aggregate, approximately 16.6 million common shares and approximately 1.7 million common shares issuable on the exercise of options, or approximately 40 percent of the issued and outstanding common shares of NQL calculated on a fully diluted basis.
The offer is subject to regulatory approvals and other customary closing conditions. Full details of the offer will be included in a formal take-over bid circular and related documents, which are expected to be mailed to NQL's shareholders not later than November 1, 2006. The offer, unless extended, will expire approximately 35 days from commencement of the offer.
NQL is an industry leader in providing downhole tools, technology and services used primarily in drilling applications in the oil and gas and utility industries on a worldwide basis.
NOV is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.
This release does not constitute an offer to purchase or a solicitation of an offer to sell securities.
NQL shareholders are advised to review the circular and any other relevant documents to be filed with the Canadian securities regulatory authorities because they will contain important information. Those materials will be mailed to NQL shareholders at no expense to them. In addition, investors will be able to obtain the documents free of charge through the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
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