Halliburton aims to replace Baker Hughes board

Halliburton Co. will nominate candidates to replace the entire board of directors of Baker Hughes Inc., in a move to pressure the rival oilfield-services company into accepting an acquisition offer.

|
Richard Carson/Reuters/File
Oilfield-services company Baker Hughes Inc. said Friday that rival Halliburton Co. plans to nominate candidates to replace the entire board of directors of Baker Hughes after negotiations about a possible acquisition stalled.

Oilfield-services company Baker Hughes Inc. said Friday that rival Halliburton Co. plans to nominate candidates to replace the entire board of directors of Baker Hughes after negotiations about a possible acquisition stalled.

Baker Hughes said that Halliburton has refused to raise its first and only offer to buy it, which the Baker Hughes board determined was not "adequate." Baker Hughes didn't disclose the offer's value.

Baker Hughes said it considers Halliburton's move to replace its directors an attempt to pressure its board into accepting the offer. A combination of the two would create a company slightly larger in revenue than Schlumberger Ltd., currently the world's biggest oil services company.

The deal talks began after Baker Hughes received an unsolicited offer from Halliburton without earlier notice last month.

"Baker Hughes is disappointed that Halliburton has chosen to seek to replace the entire Baker Hughes board rather than continue the private discussions between the parties," Baker Hughes CEO Martin Craighead said in a statement.

Halliburton, Baker Hughes and Schlumberger help energy companies find and extract oil and gas.

Baker Hughes said Halliburton would try to replace its board at the company's annual meeting in April. In the meantime, Halliburton could take its offer directly to Baker Hughes shareholders.

The deal talks between the two Houston-based companies come during a drop in oil prices that has hurt both companies' stock prices. Global oil prices have fallen 31 percent over the past 5 months to levels not seen in four years.

That will put pressure on service companies to reduce their costs. Stern Agee analysts say a deal could help Halliburton trim costs by $600 million to $750 million.

But the oil plunge has also made Baker Hughes cheaper for Halliburton to buy. Shares of Baker Hughes fell 32 percent, reducing the company's market capitalization by $10.4 billion between late June and Thursday, when news of a potential deal sent the shares higher.

Halliburton and Baker Hughes have both benefited from the boom in drilling in the U.S., which they helped fuel by developing technology to draw oil and gas from shale and other tricky geologic formations.

But even when oil prices were high, oil companies were beginning to slow capital spending and new drilling because costs were rising and profits margins were shrinking.

Now, with oil below $80 a barrel, oil companies will have even less to spend on new drilling.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Halliburton aims to replace Baker Hughes board
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2014/1115/Halliburton-aims-to-replace-Baker-Hughes-board
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe