Grey Wolf rejects Precision's second bid

Precision Drilling Trust got a prompt "No" after it boosted the cash component of its offer for U.S. target Grey Wolf Inc. and also increased the proportion of cash it's willing to pay.

Precision, based in Calgary,  said Tuesday that it raised the offer by 30 cents US to $9.30 a Grey Wolf share, valuing the bid at $1.8 billion. It also said it was willing to pay cash for 40 per cent of the total bid, up from a third.

The rest of the offer will be satisfied by issuing Precision units.

Grey Wolf of Houston quickly said its directors had looked at the revised offer and had "determined that it is not reasonably likely" to be better than its previously announced plan to merge with Basic Energy Services.

That deal, announced in April, "continues to offer the best long-term value for Grey Wolf's shareholders," the company said in a news release.

Precision's first offer was made public on June 10. Grey Wolf rejected it June 12, saying the merger with Basic Energy Services was a better deal.

Precision said the $9.30 bid was a 24 per cent premium to Grey Wolf's average closing price in the 30 trading days before June 8, the day Precision made the first offer.

Precision said it was "disappointed" that Grey Wolf would not negotiate its offer.

Grey Wolf shares closed up five cents US to $9.38 in New York trading. Precision units closed unchanged at $28.17 Cdn in TSX trading.