Halliburton bids $3.4B for Expro, may start bidding war

Halliburton hal has made a conditional bid of $3.36 billion for Expro International Group, the British oil services firm said Friday.

Halliburton's all-cash proposal of $30.14 a share is richer than the $28.36-per-share offer made in April by a consortium led by Candover Partners, which valued the company at $3.16 billion.

An Expro statement said the Halliburton proposal "does not yet constitute a firm intention to make an offer" and is subject to preconditions.

Houston-based Halliburton, which provides services and equipment to oil and natural gas companies, said it considers Expro's sub-sea and flow management sector to be an area of potential expansion. Expro's primary focus is providing services and products to measure and control the flow of oil and gas from wells.

Oil and gas industry services providers such as Expro have benefited as record energy prices prompt companies to boost spending on exploration and development of reserves.

This has attracted bidding interest from private equity firms and trade buyers for oil field services firms, with the tussle for Expro following other deals in the sector.

On April 17, Expro agreed to the bid from Candover.

On April 18, Halliburton announced it was mulling a counterbid, saying: "The offer would be based on Halliburton's analysis of synergy and other benefits that could be derived from combining its business with Expro and consistent with the company's previously espoused strategy of making acquisitions which are accretive to shareholder value".

Evolution Securities analyst Keith Morris said from a share price point of view "we are there or thereabouts" and that Halliburton, as a trade buyer, should be able to pay more than private equity which cannot extract any synergies.

Following news of the Halliburton offer a spokeswoman for Candover said: "Obviously we are looking at the situation."

Expro holds proprietary technology for oil-well maintenance, which is still in testing and whose value depends on bidders taking a gamble on its future, analysts say.

Expro's system could dramatically cut the costs of fixing oil wells because it allows this to be done from a supply ship, rather than from rigs that are expensive to hire and take a long time to move to site.

Halliburton, through its leading role in offering oilfield services to a global client base of oil companies, is in a stronger position than most to exploit the benefits of Expro's new technology.

Halliburton had faced a de facto deadline of June 2, when Expro is due to hold a shareholder meeting to vote on the Candover deal, the latest in a series in the sector.

Last September, General Electric ge agreed to buy UK oil services company Sondex, while in December U.S. private equity firm First Reserve agreed to buy Abbot Group.

Expro said Friday, "As required by the Takeover Code, Expro confirms that this announcement is not being made with the agreement and approval of Halliburton ... A further announcement will be made in due course.".