Grey Wolf rejects Precision bid

U.S. takeover target Grey Wolf Inc. has rejected an unsolicited bid from Calgary's Precision Drilling Trust.

The trust made a $1.6 billion US cash and paper offer for Grey Wolf on Wednesday, seeking to add Grey Wolf's 121 drilling rigs to its own fleet of 240 rigs.

Precision said its offer was better than the "merger of equals" that Grey Wolf announced with Basic Energy Services on April 21.

But on Thursday, Grey Wolf said its board had concluded that "Precision's offer is not superior to Grey Wolf's pending merger with Basic Energy Services Inc."

Precision had offered $9 US a share in cash and Precision units for Grey Wolf. The cash was capped at one-third of the total offer.