Hedgeweek Comment: Expro hearing outcome will indicate hedge fund clout

A court hearing to determine whether a consortium of three private equity firms should be allowed to complete their planned acquisition of oil services company Expro was adjourned on Monday, leaving in the balance a bid by hedge funds and other Expro shareholders for extra time to allow a higher bid to be considered.

Hedge fund Mason Capital and its supporters, thought to include Sandell Asset Management, Trafalgar Asset Managers, Carlson Capital, Baillie Gifford and Fidelity, want the takeover delayed by a fortnight to give shareholders the opportunity to consider a last-minute bid from US giant Halliburton.

The shareholders are seeking the adjournment to give Halliburton the opportunity to re-enter the fray and possibly trigger some kind of auction. The hearing has been delayed from yesterday until this morning in order to give Expro time to formulate its response to the objections raised by Mason Capital and other shareholders.

Candover has teamed up with Goldman Sachs Capital and AlpInvest Partners to bid GBP1.8bn, or GBP 16.15 a share, for Expro through its acquisition vehicle, Umbrellastream. Halliburton reportedly proposed a bid of GBP16.25 last Friday, but withdrew after the Expro board said it would not be in shareholders' interests to accept an offer involving delay in payment and 'execution risks'.

Under current UK takeover rules, once a bid has been rejected and the bidder has pulled out of the sales process, it is unable to make another offer for the company for the next six months. If the two-week delay were granted, that would presumably demonstrate the level of clout enjoyed by hedge funds in the financial world. Mark Curtis of law firm Simmons & Simmons was quoted as saying: 'If the court does grant the two-week delay, it will be an unprecedented challenge to the authority of the Takeover Panel.'

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