On December 12, Patterson-UTI Energy (PTEN) reached an agreement to acquire Seventy Seven Energy (SVNT). The transaction hasn’t been approved by shareholders yet. The deal is subject to a number of regulatory approvals. In this part, we’ll look at how these stocks moved.
Stock price movement
In the past year, Patterson-UTI Energy’s stock price nearly doubled. Recently, Seventy Seven Energy emerged from bankruptcy. It has been trading under the ticker “SVNT” in the over-the-counter market from August 19. Since August 19, Seventy Seven Energy’s stock price rose 74%. Patterson-UTI Energy makes up 5.1% of the VanEck Vectors Oil Services ETF (OIH).
In the past year, OIH—an ETF tracking index of 25 OFS companies—rose ~23%. In the past year, the SPDR S&P 500 ETF (SPY) rose ~19%. Patterson-UTI Energy and Seventy Seven Energy shareholders will be watching the stock price movement. Some deals in the OFS space haven’t gone through successfully in the past—like Halliburton’s (HAL) failed bid to acquire Baker Hughes (BHI). The Halliburton-Baker Hughes transaction was rejected by anti-trust authorities. To learn more, read Baker Hughes–Halliburton Merger Falls Through: Impact on BHI.
Management’s take on the proposed merger
In the related press release, Jerry Winchester, Seventy Seven Energy’s CEO commented, “Given the changes our company and industry have been through the past two years, this merger is the right decision for our shareholders, employees and the oil field services industry as a whole. This transaction will establish a company with tremendous scale, a diversified customer base and premier assets located in the most active basins in the U.S.”
Next, we’ll discuss Wall Street analysts’ new recommendations for Patterson-UTI Energy.