September 21, 2015 / 8:54 PM / 2 years ago

Canada's Total Energy Services offers to buy Strad Energy Services

(Reuters) - Canadian oilfield services provider Total Energy Services Inc (TOT.TO) said it intends to make an offer for the rest of Strad Energy Services Ltd SDY.TO at C$2.90 per share, as a slump in oil prices pushes consolidation in the industry.

Total, which currently owns about 9.95 percent of Strad’s outstanding shares, first offered to buy the company in 2014, but was spurned.

Strad’s management refused to engage in talks when Total again approached in July, the company said on Monday.

Strad shareholders will have an option to receive C$2.90 in cash or C$1.35 in cash plus 0.10 of a Total common share for every share held.

The C$2.90 per share offer represents an 11.5 percent premium to Strad’s Monday close on the Toronto Stock Exchange.

The offer of C$2.90 per share values Strad at C$108.3 million ($81.7 million) based on the company’s total outstanding shares as of June 30.

Total said it may also buy up to 5 percent of outstanding Strad shares in the normal course from the open markets.

The company said it plans to mail a takeover bid circular to Strad shareholders on or before Oct. 9.

The offer, when made, is expected to remain open for at least 35 calendar days.

Total said it estimates a deal can help achieve at least C$10.0 million of annual cost savings over time.

FirstEnergy Capital Corp and AltaCorp Capital Inc are acting as financial advisers to Total.

Up to Monday’s close of C$14.29, Total’s shares had risen about 10 percent this year on the Toronto Stock Exchange. Strad’s shares had fallen 27.4 percent during the same period. They closed at C$2.60.

Reporting By Darshana Sankararaman in Bengaluru; Editing by Sriraj Kalluvila

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