Grey Wolf turns down increased offer from Precision Drilling

By Lisa Kerner

Charlotte, N.C., June 17 - Grey Wolf, Inc. said the second unsolicited proposal from Precision Drilling Trust to acquire the company for $9.30 per share in cash and trust units is not reasonably likely to result in a superior proposal to Grey Wolf's pending strategic merger with Basic Energy Services, Inc.

The merger agreement with Basic Energy and Horsepower Holdings, Inc. has not been amended and remains in effect, according to a Grey Wolf news release.

Precision Drilling's latest offer is about $1.00 higher than, and a 12.3% premium to, Grey Wolf's closing price of $8.28 on June 9, the day before Precision Drilling's interest in Grey Wolf became public, Precision Drilling stated in its news release.

As previously reported, Precision Drilling initially made an unsolicited proposal to acquire Grey Wolf for cash and trust units valued at $9.00 per share.

The agreement with Basic Energy calls for Grey Wolf shareholders to receive $1.82 in cash and 0.25 of a share of new Grey Wolf common stock for each share of Grey Wolf they currently own or, based on the exchange ratio, one share of new Grey Wolf for each four shares of Grey Wolf held in addition to the cash consideration, a prior news release said.

Basic Energy shareholders will receive $6.70 in cash and 0.9195 of a share of new Grey Wolf for each share of Basic Energy they currently own, it was already noted.

Houston-based Grey Wolf is the fourth-largest provider of contract land drilling services in the United States.

Basic Energy is the third-largest well servicing rig contractor in the United States. The company is located in Midland, Texas.

Precision Drilling is a Calgary, Alta., oil and gas drilling and exploration company.

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