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Bidding War for Expro International

A Bidding War for Well Equipment Maker

Published: May 24, 2008

LONDON — A group of private equity firms increased its offer for the Expro International Group, which makes deepwater well equipment, to more than £1.71 billion, or $3.4 billion, on Friday, entering into a bidding war with Halliburton amid record oil prices and rising exploration costs.

Candover Partners, Goldman Sachs Capital Partners and AlpInvest raised their bid for Expro, based in Britain, to £15.50 a share in cash, from £14.35 last month, topping an offer by Halliburton on Friday worth £15.25 an Expro share.

Expro’s shares rose in London on Friday, indicating that investors expect a higher offer.

“The deep water is an under- explored area, which is seeing meaningful exploration success recently, but it is very costly to do so,” said Waqar Syed, an analyst at Tristone Capital in Denver. “Any ways you can find to cut costs through technology are successful.”

A takeover of Expro would help Halliburton expand its oil services and compete with its larger rival, Schlumberger. Rising oil prices and depleting reserves at existing fields forced oil companies to seek access to oil in politically fragile locations that are harder and more expensive to reach. Some analysts expect oil companies, like Exxon MobilRoyal Dutch Shell and Chevron, to increase their spending on exploration this year.

Private equity firms are also looking to profit from a boom in commodities. The buyout firm First Reserve agreed to buy Saxon Energy Services of Canada in conjunction with Schlumberger for $582 million this month and acquired the Scottish drilling company Abbot Group for £906 million in December.

Halliburton, the world’s second-largest oil field contractor after Schlumberger, acknowledged the private equity firms’ higher bid on Friday but urged Expro shareholders to take no action as discussions continue.

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