Total Energy Services Inc. says it has acquired more than 80 per cent of Savanna Energy Services Corp. stock in its hostile takeover bid – but is once again extending its offer to try to gather all outstanding shares.
Total Energy had already extended its offer to investors to win full control of the drilling firm. On Friday, it said the offer is now extended to April 27, and said it will further initiate a subsequent acquisition transaction or compulsory acquisition, if necessary.
The deal is part of a wave of consolidation as oilfield service companies struggle in an era of low oil and gas prices and as the energy industry rapidly changes. Savanna had fought Total Energy's hostile bid from the time it first surfaced last year.
However, the fractious saga appeared all but over when Savanna, together with Total Energy, announced this week that Savanna's board of directors has been "reconstituted." Only one person from the original board remains, Allen Brooks, and the new board includes Total Energy chief executive Dan Halyk, as well as Lyle Whitmarsh, who left his role as chief executive of Trinidad Drilling Ltd. last month.
Total Energy has also already posted a letter of welcome to Savanna employees.
In March, it became clear Total Energy had beaten out a friendly offer from Western Energy Services Corp. Although Western's deal was potentially more lucrative on a per-share basis, investors were concerned about the combination of two materially indebted companies – Savanna and Western – and the potential for profits down the road.