Engage Xr Regulatory News (EXR)

23 Jun 2008 07:00

Halliburton Company

20 June 2008

Halliburton Company ("Halliburton") - Rejection of Halliburton's increased proposal for Expro International plc ("Expro") and termination of talks

Halliburton's increased proposal

Halliburton announces that on 20 June 2008 it made an increased cash offer proposal to Expro of 1,625 pence per Expro share (the "Increased Offer"). Halliburton's Increased Offer was conditional on, amongst other things, the Expro Independent Directors agreeing to convene an EGM and Court Meeting to allow shareholders to consider the Halliburton Increased Offer and agreeing to delay the Court hearings on 23 June 2008 and 25 June 2008 to sanction the Umbrellastream Scheme.

Halliburton's Increased Offer was not conditional on the recommendation of the Expro Independent Directors.

Based on a proposal by Expro to Halliburton on 17 June 2008, Halliburton had expected the competing offers for Expro between Halliburton and Umbrellastream to be resolved by an auction process conducted under Rule 32.5 of the Takeover Code. Subsequently, Halliburton confirmed to Expro that Halliburton agreed in principle to participate in an auction process. If Expro had agreed to post Halliburton's Increased Offer and convened the necessary EGM and Court Meeting for 30 July, then Halliburton would have expected any such auction to take place on or before 16 July.

Subject to its conditions being satisfied, Halliburton had stated to Expro its readiness to announce its Increased Offer. All necessary documentation had been provided to Expro in order to allow the Increased Offer to be announced today. Halliburton had also informed Expro that it had completed all due diligence to its satisfaction and financing for its Increased Offer was in place.

On 20 June it became apparent that Expro would not provide the required co-operation to enable Halliburton to make the Increased Offer. Although the Increased Offer was 10 pence per Expro Share higher than the Umbrellastream Scheme, entitling the Expro Independent Directors to delay the Court Hearings, the Expro Independent Directors did not consider Halliburton's 1,625 pence per Expro Share (and agreement in principle to participate in an auction) to be sufficient for them to delay seeking Court sanction of the Umbrellastream Scheme on 23 June. Accordingly Halliburton has terminated talks with Expro and no longer intends to make an offer for Expro. Halliburton has reserved the right to make an offer for Expro in certain circumstances, including if the Court declines to sanction, or there is a delay of 14 days or more in sanctioning, the Umbrellastream Scheme.

Halliburton is disappointed that the Expro Independent Directors were unwilling to provide the required co-operation to enable Halliburton to make the Increased Offer, thereby depriving Expro shareholders of the opportunity to benefit from Halliburton's Increased Offer and the prospect of any further increases that might subsequently be made, whether pursuant to any auction required by the Takeover Code or otherwise.

Termination of talks with Expro

For the purposes of Rule 2.8 of the Takeover Code, Halliburton reserves the right to announce an offer or possible offer or make or participate in an offer or possible offer for Expro and/or take any other action which would otherwise be restricted under Rule 2.8 of the Takeover Code within the next six months in the event of:

any adjournment or delay, of 14 days or more, to the First Court Hearing or Second Court Hearing to give effect to the Umbrellastream Scheme on 23 June and 25 June respectively, and the Board or Expro Independent Directors agree to Halliburton taking such action;

the Court not sanctioning the Umbrellastream Scheme or confirming the Capital Reduction, the Umbrellastream Scheme failing, being withdrawn, lapsing or ceasing to be recommended by the Expro Independent Directors, and the Board or Expro Independent Directors agree to Halliburton taking such action;

an announcement by or on behalf of Expro or any third party (other than Umbrellastream) relating to the making of an offer for Expro;

an announcement by or on behalf of Expro of a "whitewash" proposal or any proposal to implement a scheme of arrangement, reverse takeover, merger, dual listed company combination or transaction of a similar nature with a third party;

an announcement by or on behalf of Expro of any intention or proposal to undertake any acquisition or disposal of a material amount (where "material amount" is defined in Note 2 of Rule 21.1 of the Takeover Code) or any material recapitalisation (where "material" is defined as 10% or more of Expro's equity market capitalisation as at the close of business on the date of this announcement); or

if there is any other material change in circumstances.

Background

On 22 May Halliburton made a private proposal to Expro. That proposal formed the basis for Expro agreeing to announce on 23 May that it was adjourning the Expro EGM and Scheme Meeting to consider the Umbrellastream Scheme. However, later that day, Umbrellastream proposed to increase its offer. In recommending that increased offer the Expro Independent Directors accepted significant changes to the implementation agreement between Umbrellastream and Expro, which restricted the rights of the Expro Independent Directors to adjourn the Expro EGM and Scheme Meeting or to delay seeking Court sanction of the Umbrellastream Scheme scheduled for 23 June (bringing forward by ten weeks the date by which the Expro EGM and Scheme Meeting had to be held).

On 20 June 2008, Halliburton made its Increased Offer to Expro. As a result of the events described above, Halliburton's Increased Offer was pre-conditional on confirmations to Halliburton that there would be no disclosure of its terms to Umbrellastream before the Increased Offer was publicly announced (or withdrawn).

The announcement of such a higher cash offer would have satisfied the 20 June deadline, agreed by Expro, permitting Expro to delay the Court Hearings to sanction the Umbrellastream Scheme, allowing Expro time to implement Halliburton's Increased Offer.

Halliburton's Increased Offer was structured as a scheme of arrangement of Expro, subject to the execution of an implementation agreement pursuant to which Expro would have agreed to postpone the Court Hearings on 23 and 25 June 2008 to implement the Umbrellastream Scheme until the earlier of: (i) the end of an auction process conducted under Rule 32.5 of the Takeover Code (should such a process take place), or (ii) the release by Halliburton of a no increase statement. The implementation agreement also would have contained a commitment for Expro to co-operate in posting a scheme document to Expro shareholders and setting an EGM date of 30 July 2008 for Expro shareholders to consider the Halliburton Increased Offer. If the Increased Offer had been announced today Halliburton expected the scheme of arrangement and despatch of consideration to shareholders to have been completed by the middle of August.

Halliburton did not seek a recommendation from the Board of Expro for the Increased Offer.

Based on a proposal from Expro made on 17 June 2008, Halliburton had expected the competing offers for Expro between Halliburton and Umbrellastream to be resolved by an auction process conducted under Rule 32.5 of the Takeover Code. Expro informed Halliburton that Umbrellastream had agreed the principles of such an auction process. On 20 June 2008, Halliburton confirmed its agreement  in principle to participate in an auction process. Halliburton's Increased Offer would have been sufficient to permit Expro to delay the Court Hearing sanctioning the Umbrellastream Scheme pursuant to the Implementation Agreement between Expro and Umbrellastream and then allow an auction process to take place. By proposing an EGM on 30 July, Halliburton anticipated that any such auction would take place on or before 16 July 2008.

Halliburton and its advisers had provided Expro with an assessment of the anti-trust position in relation to Halliburton's proposed acquisition of Expro. The proposed implementation agreement contained a contractual undertaking from Halliburton to Expro that Halliburton would take all steps which it is capable of taking to resolve any objections raised by any competition and regulatory authority in order to satisfy the regulatory conditions to Halliburton's Increased Offer.

Subject to its conditions being satisfied, Halliburton had stated to Expro its readiness to announce its Increased Offer. All necessary documentation was provided to Expro in order to allow the Increased Offer to be announced today. Halliburton had also informed Expro that it had completed all due diligence to its satisfaction and financing for its Increased Offer was in place. Halliburton had agreed a framework with the United States Department of Justice to enable it to make a Rule 2.5 offer to acquire Expro with no special conditions to closing relating to the US Foreign Corrupt Practices Act of 1977. Halliburton had prepared its principal anti-trust filings and was in a position to file under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and submit a merger notification to the OFT on 23 June 2008.

Enquiries

Capitalised terms used in this announcement have the meanings given to them in the Expro circular to shareholders dated 9 May 2008.

UBS Investment Bank is acting exclusively for Halliburton and for no one else in connection with the possible acquisition of Expro and will not regard any other person as its client nor be responsible to anyone other than Halliburton for providing the protections afforded to clients of UBS Investment Bank, nor for providing advice in relation to the possible acquisition of Expro, the contents of this announcement or any matter referred to herein.

This announcement has been prepared for the purpose of complying with English law, the Listing Rules published by the Financial Services Authority, the rules of the London Stock Exchange and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.