Weatherford a Possible Purchase Target, Former KIT CEO Lowers Bid: Merger and Acquisitions Update
Analyst James Crandell at Dahlman Rose thinks that Weatherford International (NYSE:WFT) might be a potential merger and acquisition target for two principal reasons. One is that the filing of its back 10-Ks and 10-Qs, along with subsequent resolution with regulators, will allow Weatherford to concentrate on decreasing its debt while improving free cash flow and return on capital. The second is that its shares are undervalued at current market prices. It is also thought that Halliburton Company (NYSE:HAL) and General Electric Company (NYSE:GE) might be taking looks at Weatherford. The former might be attracted to the firm for its leadership position in artificial lift, and a strong presence in Russia, while GE could snap up Weatherford to unify its disparate product lines and also to establish it as a major sector player.
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Kaleil Isaza Tuzman, the former Chief Executive of KIT Digital (NASDAQ:KITD), has significantly reduced his price to acquire the video tech supplier, pointing to the firm’s worsening liquidity and capital structure problems. Tuzman had sent a letter to Kit Digital’s board offering indicative price range of between $1.35 and $1.70 per shar, with the mid-point of the bid valuing the company at $87.08 million. Currently, that amount is more than twice its market value of around $40.93 million.