Halliburton may wreck Candover deal

The oil and gas giant is compiling due diligence on Expro, the FTSE 250 oil and gas company, although it will need to trump a large premium offered in an agreed bid by Candover.

Halliburton, the US oil giant, is considering a higher bid for Expro, the FTSE 250-listed oil and gas distribution company, than a consortium led by Candover, the European buyout firm, according to a regulatory statement. The consortium agreed its £1.61 billion (€2 billion; $3.19 billion) offer for the company yesterday.

Expro: Candover
consortium faces

The oil giant is in due diligence with Expro. The rival bid will need to trump a £14.35 per share bid at a premium of 54.9 percent to the closing price of £9.26 per share on 28 February 2008, the day before Expro said it had received an offer. Expro’s shares have risen to £15.10 per share, at 1732BST, in expectation of a counter bid, a premium of nearly 5 percent to the offer.

The Candover consortium has assembled a large syndicate of banks to support its bid. RBS, Lloyds TSB, HSBC, HBoS, DNB Nor, the Norwegian financial services group and the Royal Bank of Canada provided slightly less than £1 billion in debt, according to Candover.

Expro measures, improves, controls and processes the flow of oil and gas wells.

Should it succeed the European buyout firm will take a more than 40 percent stake in Expro. Goldman Sachs Capital Partners, the captive arm of the investment bank, will take a similar stake, and AlpInvest Partners, the Dutch investment firm, is looking to acquire the remainder. AlpInvest was sourced as a partner for the deal as a long term investor in Candover’s funds, Candover said. Goldman Sachs International also advised the consortium on the deal.

The oil and gas sector is one of the few to remain relatively unaffected by the credit crunch as the high oil price has continued to drive dealflow.

First Reserve, the specialist energy firm, signed the largest agreed deal of the first quarter, with its C$3.7 billion ($3.6 billion, €2.5 billion) take-private of CHC Helicopter, the offshore oil industry transport company. Numerous other deals include the $625 million consortium buyout of Shelter Bay Energy, a Canadian oil and gas exploration company. Riverstone, the specialist energy firm, Goldman Sachs and Kelso & Co, the US mid-market firm, were part of the five-strong Shelter Bay consortium.

Candover’s previous deals in the sector include Vetco, a drilling company, which it fully exited last year making a 4.1 times return and Wellstream, a pipeline company, which made Candover a 6.5 times return when it floated in April last year, Candover said.

Last year Candover managed to secure victory in one of the more competitive bidding wars for a listed company since the credit crunch began. It eventually managed to buy Stork, the Dutch conglomerate, for €1.5 billion ($2.4 billion) by partnering with a consortium of Icelandic rival bidders, which had built up a blocking stake in the company.