Professor Elam

Weekend Nov 15 2014

Halliburtonis in talks with Baker Hughes BHI. Now the talks turn hostile.

I have urged students to read for contextual understanding. ere is a good example. The freindly talks may take an unfriendly turn as HAL owns some BHI stock and can make Board nominations.

And as the article says, is this really such a great deal for the customers?

BHI

HAL would have to offer a higher price to get BHI share holders to do the deal. As you can see rumore and expectations are driving the rpice up.

This could develop into a proxy fight, a fight over the right to vote shares which could determine the outcome of the deal.

Bottom line, I would definitely want to be working for HAL and not BHI if the deal goe sthrough. You can bet HAL will sack most of the BHI employees and use this as a way to keep prices from falling by eliminating a competitor. 

If you have not read my posts on the falling oil price, you might go back and do so now. This is a result of falling oil prices.