Ensign in ‘pole position’ to buy Trinidad after ultimatum

Ensign Energy Services (OTCPK:ESVIF +1.2%) may have gained the advantage in its bid to acquire Trinidad Drilling (OTCPK:TDGCF) after giving shareholders a tighter deadline to accept its cash offer or settle for a lower all-stock bid from Precision Drilling (PDS +4.9%), Bloomberg reports.

Ensign Energy Services Inc. may have taken the upper hand in the battle to acquire Trinidad Drilling Ltd., after giving shareholders a tighter deadline to accept its cash offer or settle for a lower all-stock bid from Precision Drilling Corp.

Ensign on Friday accelerated the expiration of its cash bid by more than two weeks to Nov. 27, giving PDS’s shares little time to recover from current market weakness; Ensign’s offer values Trinidad at C$1.68/share while PDS’s bid is ~C$1.50/share, based on Monday’s stock price.

The Canadian oilfield-services provider has accelerated the expiration of its cash bid by more than two weeks to Nov. 27, giving rival Precision Drilling’s shares little time to recover from the current market doldrums.

Gillies also noted that the expiration of Ensign’s bid comes before Trinidad and Precision’s shareholder meetings, and that Ensign only needs a bare majority of Trinidad shares to vote in its favor.

“Ensign appears to be in pole position to be successful in its hostile bid for Trinidad Drilling, and this move has notably shortened the time period under which Precision’s shares have to appreciate to create a competitive bid,” says GMP FirstEnergy analyst Ian Gillies.

Trinidad shares rose 2.2% to $1.25 at 11:47 a.m. in Toronto. Precision Drilling climbed 4.6% to $2.59, and Ensign gained 4 percent to $4.19. All three companies are based in Calgary.

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