National Oilwell plans offering to exchange for Grant Prideco 6 1/8% notes

By Jennifer Chiou

New York, March 7 - National Oilwell Varco, Inc. intends to issue $174.59 million of 6 1/8% senior notes due 2015 in exchange for Grant Prideco, Inc.'s 6 1/8% senior notes due 2015, according to an S-4 filing with the Securities and Exchange Commission.

The company said that the exchange price per Grant Prideco note will be 100% of par for those notes tendered for exchange prior to the early deadline and will be 95% of par for those tendered thereafter.

National Oilwell said it is also soliciting consents to amend the indenture to eliminate covenants, restrictions on Grant Prideco's ability to consolidate, merge or sell all or substantially all of its assets and some events of default. Grant Prideco will pay a $2.50 per $1,000 principal amount consent fee to those who deliver consents.

On Feb. 7 National Oilwell agreed to voluntarily provide the U.S. Department of Justice with additional time to review National Oilwell's proposed acquisition of Grant Prideco.

As a result, National Oilwell withdrew and refiled its pre-merger notification and report form under the Hart-Scott-Rodino Antitrust Act, restarting the 30-day initial review period, according to a previous company news release.

In December, National Oilwell agreed to acquire Grant Prideco for a total consideration of $58.00 per share.

As previously reported, the Houston-based companies' definitive agreement gives Grant Prideco shareholders $23.20 in cash and 0.4498 of a share of National Oilwell per share of Grant Prideco.

As already stated, the merger is expected to close following the Grant Prideco stockholder meeting late in the first quarter or early in the second quarter.

Houston-based National Oilwell manufactures and sells equipment and components used in oil and gas drilling and production operations.

Grant Prideco, also based in Houston, specializes in drill bits, drill stem technology and specialty tools for the oil and gas industries.

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