Halliburton Company (NYSE:HAL) and Baker Hughes Incorporated (NYSE:BHI) announced that the companies have terminated the merger agreement they entered into in November 2014, effective April 30, 2016.
“While both companies expected the proposed merger to result in compelling benefits to shareholders, customers and other stakeholders, challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action,” said Dave Lesar, Chairman and Chief Executive Officer of Halliburton. “I sincerely thank both our employees as well as the Baker Hughes employees for their tireless efforts throughout the regulatory review process. While disappointing,Halliburton remains strong. We are the execution company – our strategy, technologies and service quality are focused on helping customers maximize production at the lowest cost and driving industry leading growth, margins and returns.”
“Today’s outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies’ employees,” said Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes. “This was an extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators, both in the United States and abroad. As we turn the page on this chapter, I want to thank our customers for their patience and continued loyalty over the past 18 months. I also want to thank the entire Baker Hughes team for their unwavering dedication and commitment during this process. Baker Hughes is strongly positioned to build on its foundation and heritage as a technology innovator that differentiates for our customers and delivers compelling value to shareholders.”
In connection with the termination of the merger agreement, Halliburton will payBaker Hughes the termination fee of $3.5 billion by Wednesday, May 4, 2016.
Halliburton will discuss the termination of the merger agreement during its previously scheduled conference call on Tuesday, May 3, 2016, at 8:00 AM Central Time (9:00 AM Eastern Time). Please visit the website to listen to the call live via webcast. Interested parties may also participate in the call by dialing (888) 793-5581 withinNorth America or (973) 935-8723 outside North America. A passcode is not required. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call’s start time. (Original Source)
Shares of Halliburton closed last Friday at $41.31, up $0.27 or 0.66%. HAL has a 1-year high of $50.20 and a 1-year low of $27.64. The stock’s 50-day moving average is $37.37 and its 200-day moving average is $35.32.
On the ratings front, Halliburton has been the subject of a number of recent research reports. In a report issued on April 28, RBC analyst Kurt Hallead downgraded HAL to Hold. Separately, on April 25, Citigroup’s Scott Gruber maintained a Buy rating on the stock and has a price target of $48.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Kurt Hallead and Scott Gruber have a total average return of -7.9% and 8.6% respectively. Hallead has a success rate of 41.3% and is ranked #3629 out of 3832 analysts, while Gruber has a success rate of 75.9% and is ranked #394.
Overall, 3 research analysts have assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $54.00 which is 30.7% above where the stock closed last Friday.
Halliburton Co. provides services and products to the energy industry related to the exploration, development, and production of oil and natural gas. The company operates through two segments: Completion & Production and Drilling & Evaluation.