Nabors Industries Ltd. (NYSE:NBR), a company specializing in drilling oil and gas wells, announced today that it has received 13 demand letters from putative shareholders concerning its merger with Parker Drilling Company. The company's stock, which has seen a 7.57% gain over the past week but remains down 24.48% over the last year, currently trades at $64.10.
According to InvestingPro analysis, Nabors maintains a healthy liquidity position with a current ratio of 1.88, indicating its ability to meet short-term obligations. These letters allege deficiencies in the proxy statements provided to shareholders and demand corrective disclosures.
The merger, initially agreed upon on October 14, 2024, involves Parker becoming a wholly owned subsidiary of Nabors. The definitive proxy statement was filed on December 9, 2024, ahead of the special general meeting scheduled for January 17, 2025, where Nabors' shareholders will vote on the issuance of common shares to Parker stockholders as part of the merger agreement.
Nabors and Parker believe the demand letters are without merit, asserting that their proxy statements fully comply with applicable laws. However, to avoid the costs and distractions of potential litigation, the companies have chosen to voluntarily amend and supplement the definitive proxy statement. This action is not an admission of the need or materiality of the additional disclosures.
The supplemental information includes detailed financial projections for Nabors, clarifying adjusted gross margin, adjusted EBITDA, and capital expenditures for the fiscal years 2024 and 2025. With a current gross profit margin of 40.75% and EBITDA of $890.89 million in the last twelve months, the company's financial metrics are crucial for merger evaluation. InvestingPro subscribers can access comprehensive financial health scores and additional insights, with 8 more exclusive ProTips available for deeper analysis of Nabors' performance and prospects.
Additionally, Parker's unaudited prospective financial information has been expanded upon, with new assumptions about market growth, revenue forecasts, and industry influences such as oil and gas prices and drilling activity levels.
The information is based on a press release statement and is intended to provide Nabors shareholders with all relevant details to make an informed decision at the upcoming special general meeting. The additional disclosures have been incorporated into the definitive proxy statement and are available to all shareholders.
In other recent news, Nabors Industries reported a robust Q3 2024 performance, with an adjusted EBITDA of $222 million. The company also announced the successful acquisition of Parker Wellbore, which is anticipated to significantly enhance the Drilling Solutions segment. Despite a slight decrease in the U.S. Lower 48 rig count, Nabors maintains a strong international presence and has plans for continued expansion, with a robust pipeline anticipated for 2025.
The company's Drilling Solutions and Rig Technologies segments have seen significant growth, with a combined EBITDA of over $40 million. The acquisition of Parker Wellbore is expected to contribute $180 million in EBITDA for 2024. Free cash flow for the year to date exceeds $80 million, with Q3 free cash flow standing at $18 million.
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