Stakes Rising for H & H Takeover by Weatherford

The stock market is raising the stakes on the pending acquisition of Santa Paula’s H & H Oil Tool Co. by Houston-based Weatherford International Inc.

When the takeover was first announced in late April, it was estimated that H & H shareholders would receive Weatherford stock valued at $28 million. Lately, however, the 2.6 million Weatherford shares to be paid have been moving upward.

The stock, which traded at slightly more than $10 on the American Stock Exchange in late April, was quoted in the mid-$11 range early last week, raising the merger’s paper value to about $31 million.

Later in the week, however, after the two companies announced a definitive agreement, Weatherford jumped to the $14-per-share range, bringing the projected price to $36 million.

H & H, whose shares traded at less than $4 on NASDAQ when the merger was first announced, sold in the $10 range last week. H & H, like Weatherford, rents equipment to the oil and gas industry.

“Oil stocks in general have been strong lately because the price of oil has been going up,” noted Bob Foote, H & H’s chief financial officer.

As for the final value of the acquisition, Foote says that will be decided by the stock market. “The final figure won’t be known until early September, when the merger is scheduled to be completed. Until then, I imagine the two stocks will move in tandem.”