Wellstream in sale talks to GE, other firm: report

LONDON (BestGrowthStock) – British oilfield services company Wellstream Holdings PLC (WSML.L: ) is back in talks with General Electric Co (GE.N: ), as well as National Oilwell Varco (NOV.N: ), over a potential 755-million-pound ($1.2 billion) takeover deal, a British newspaper said on Wednesday.

The revival of talks come nearly two months after Wellstream spurned GE’s earlier $1.2 billion bid. Wellstream has allowed both GE and National Oilwell Varco, the largest U.S. oilfield equipment supplier, access to confidential information as it tries to negotiate a higher offer from the two bidders, The Daily Telegraph said, citing unnamed sources.

For a link to the Daily Telegraph report click: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8171660/Wellstream-opens-books-to-General-Electric-and-Oilwell-Varco.html

Shares in Wellstream gained 1.8 percent to 746 pence, below the 750 pence per share value of GE’s initial approach.

A GE spokesman declined to comment on the report, while a National Oilwell executive did not respond to calls seeking comment. Wellstream declined to comment when contacted by Reuters.

GE said in October Wellstream had rejected an approach it made which valued the company at 755 million pounds.

Royal Bank of Canada analyst Todd Scholl said he thought any new bid would have to be pitched at between 775 pence and 800 pence per share.

GE Chief Executive Jeff Immelt is in the midst of a drive to focus the company on its industrial operations, and GE officials have said they could do up $30 billion in takeovers, of $1 billion to $3 billion in size, over the next few years.

On the day its Wellstream bid had been rejected, GE Vice Chairman John Krenicki said it had “lots of options” for acquisitions and unveiled a $3 billion agreement to buy Dresser Inc, a maker of gas engines used in oil production and mining.

Houston-based National Oilwell Varco has a market capitalization of about $25.72 billion. With about $3 billion in cash on its books, a takeover of Wellstream’s size “would essentially be bite-sized” for the company, analysts at Simmons & Co wrote in a research note.


Wellstream makes flexible pipes used by oil companies in deep water, an area set for strong growth due to major finds in Brazil, where state-run oil firm Petrobras (PETR4.SA: ) accounted for around 60 percent of Wellstream’s business in 2009.

“It’s important that these companies make sure that Petrobras is on board with their acquisition of the company because clearly that’s the future driver of growth,” RBC’s Scholl added.

Wellstream, whose main competitor in flexible pipe making is the French offshore engineering group Technip (TECF.PA: ), has been a frequent subject of takeover speculation.

GE shares were up 1.8 percent to $16.11 and National Oilwell Varco shares were up 1 percent to $61.70 on the New York Stock Exchange, amid a broad rally in U.S. stocks (Read more about the stock market today. ).

($1=.6431 Pound)

(Reporting by Sarah Young and Michel Rose in London, additional reporting by Scott Malone in Boston and Matt Daily in New York; Editing by Muralikumar Anantharaman and Erica Billingham)

Wellstream in sale talks to GE, other firm: report