Recovery in drilling due to higher oil and natural gas prices and now the potential U.S. expansion via Grey Wolf.
There's a feeding frenzy going on in the North American energy business, and Canada's Precision Drilling Trust is getting in on the action. The company said it was offering $1.6 billion to purchase Houston-based rival Grey Wolf and in so doing bust up a deal for that company.
On Tuesday, Calgary-based Precision Drilling Trust (nyse: PDS - news - people ) confirmed it made an unsolicited $9 per share bid for Houston-based oil-and-natural-gas driller Grey Wolf (amex: GW - news - people ). The takeover offer includes both cash and stock for each Grey Wolf share, with the cash contribution limited to no more than a third of the total price. The deal is worth about $1.6 billion.
Grey Wolf stock jumped 74 cents, or 8.9%, to $9.02, on the American Stock Exchange. Grey Wolf’s shares are hovering around the offer price, indicating that investors believe the deal will go through. Precision units fell 4.0%, or 1.12 Canadian dollars ($1.10), to 27.03 Canadian dollars ($26.45) on the Toronto Stock Exchange on Tuesday, while in New York, the company's shares dropped 3.8%, or $1.04, to $26.46.
