Delaware court says C&J tie up with Nabors unit can proceed

December 20
12:45 AM 2014

A merger between oilfield services provider C&J Energy Services Inc (CJES.N) with a unit of Nabors Industries Ltd. (NBR.N) can proceed, Delaware's supreme court ruled on Friday.

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.

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