Allis-Chalmers Boosts Bronco Bidadmin
Shares of Allis-Chalmers Energy dropped about 5 percent in afternoon trading, after the oilfield drilling and services company raised its offer for Bronco Drilling by 12 percent, to $18.25 a share from $16.33.
Bronco shares have risen since the buyout was first announced in January. They closed at $18.10 Friday, but lost some ground in Monday trading — down 70 cents in afternoon trading at $17.48.
“Near-term, this is likely a net negative for Allis-Chalmers as managements perceived takeover negotiation and integration savvy, the intangible advantage that was supposed to distinguish Allis-Chalmers from just another ‘oil patch roll-up story,’ has sustained yet another significant blow in a series since mid-2007,” said Wachovia Capital Markets analyst Tom Curran.
“Medium-to-long term, however, this deal could, ironically, help restore Allis-Chalmers’ original luster, given the steadily improving outlook for land rig activity in North America and a recent affirmation of the wisdom of the “rig-based bundling” strategy from none other than Schlumberger … via its acquisition of Saxon Energy Services.”