A pumpjack works at a well head on an oil and gas installation near Cremona, Alta. on Oct. 29, 2016.Jeff McIntosh/The Canadian Press
Calfrac Well Services Ltd. says a U.S. competitor urging shareholders to reject its recapitalization plan is a “wolf in sheep’s clothing” whose real goal is a corporate takeover.
The debt-laden Calgary-based company says Texas-based Wilks Brothers LLC, which owns U.S. oil field services rival ProFrac Services LLC, would own 60 per cent of Calfrac if its alternative plan is adopted.
It says it would then have control over how each company bids and provides service to U.S. customers, adding the proposal could lead to a later merger with ProFrac or other transaction in which Calfrac minority shareholders would have limited alternatives.
The battle for Calfrac has pitched debt-holders against shareholders, with the company saying its proposal has the backing of 78 per cent of holders of senior unsecured notes and Wilks Brothers, which owns almost 20 per cent of the shares, urging fellow shareholders to turn down the deal.
The reorganization under the Canada Business Corporations Act must be supported by two-thirds of Calfrac’s debt-holders and shareholders to proceed. Votes are to be held Sept. 17.
Wilks Brothers says its proposal – which it argues offers better recoveries for stakeholders and a stronger capital structure for Calfrac – will remain on the table if shareholders vote down the company plan.
“Wilks Brothers is a wolf in sheep’s clothing and its actions seem intended to intimidate shareholders and senior unsecured noteholders,” Calfrac said in a statement.
“The Wilks Brothers proposal is a thinly veiled change of control transaction offering no change of control or ‘takeover’ premium to shareholders.”
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