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Sept 21 (Reuters) - Canadian oilfield services provider
Total Energy Services Inc TOT.TO said it intends to make an
offer for the rest of Strad Energy Services Ltd SDY.TO at
C$2.90 per share, as a slump in oil prices pushes consolidation
in the industry.
Total, which currently owns about 9.95 percent of Strad's
outstanding shares, first offered to buy the company in 2014,
but was spurned.
Strad's management refused to engage in talks when Total
again approached in July, the company said on Monday.
Strad shareholders will have an option to receive C$2.90 in
cash or C$1.35 in cash plus 0.10 of a Total common share for
every share held. ID:nCCN2t6867
The C$2.90 per share offer represents an 11.5 percent
premium to Strad's Monday close on the Toronto Stock Exchange.
The offer of C$2.90 per share values Strad at C$108.3
million ($81.7 million) based on the company's total outstanding
shares as of June 30.
Total said it may also buy up to 5 percent of outstanding
Strad shares in the normal course from the open markets.
The company said it plans to mail a takeover bid circular to
Strad shareholders on or before Oct. 9.
The offer, when made, is expected to remain open for at
least 35 calendar days.
Total said it estimates a deal can help achieve at least
C$10.0 million of annual cost savings over time.
FirstEnergy (NYSE:FE) Capital Corp and AltaCorp Capital Inc are acting
as financial advisers to Total.
Up to Monday's close of C$14.29, Total's shares had risen
about 10 percent this year on the Toronto Stock Exchange.
Strad's shares had fallen 27.4 percent during the same period.
They closed at C$2.60.
($1 = 1.3251 Canadian dollars)