Delaware court says C&J tie up with Nabors unit can proceed
The court overturned an injunction from a lower court that said C&J should have sought more bids before agreeing to the $2.86 billion cash and stock deal in June. A retirement fund for employees of the city of Miami had asked for the injunction.
The court said the injunction was granted in "error" because all shareholders will have a chance to vote on the merits of the agreement, which plaintiffs said did not give adequate protections to C&J shareholders.
The deal has drawn the attention of tax experts tracking so-called inversions, in which U.S. companies reincorporate abroad to cut their tax bills.
The court said the transaction is unusual as C&J, a U.S. corporation, will acquire a subsidiary of Nabors, which is domiciled in Bermuda. But Nabors will retain a majority of the equity in the surviving company, which will be based in Bermuda to obtain more favorable tax rates, the court said.
Shares of C&J Energy Services ended up 5 percent at $14.33, while Nabors shares soared to close up 15 percent at $13.63 on the New York Stock Exchange.