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Ensign Energy makes bid for fellow Alberta driller Trinidad Drilling

Ensign Energy Services Inc. is offering to acquire its fellow Calgary, Alberta-based driller Trinidad Drilling Ltd. at C$1.68 per common share, an all-cash proposal valued at about C$947 million.

The deal value represents a 20% premium to the volume-weighted average price of Trinidad shares from Aug. 1 to Aug. 10 and includes C$477 million representing the assumption of Trinidad's outstanding net debt as of June 30, according to an Aug. 13 news release from Ensign. The offer follows Trinidad's conclusion of a strategic review Aug. 1, after which Ensign presented a proposal to Trinidad's board for a fully funded deal that would provide immediate liquidity.

Ensign, which already owns about 9.8% of Trinidad's outstanding shares, said Trinidad's strategic review did not result in any agreement to boost shareholder value. Ensign said Trinidad's "uncertain" plan "relies on successful execution of key initiatives over a lengthy period of five years ... which we strongly believe should have already been part of Trinidad's corporate strategy versus being a 'future plan.'" Trinidad shareholders would also be left exposed to unpredictable share prices, Ensign said in its release.

Ensign plans to file the offer with securities regulators in the next two weeks. BMO Capital Markets is serving as Ensign's exclusive financial adviser. Osler Hoskin & Harcourt LLP is acting as its legal counsel and Kingsdale Advisors as its strategic communications adviser, information agent and depositary.