In a sign of times that are disrupting plans throughout the oil and gas chain, Weatherford International plc has done an about-face on its plan to raise $1 billion less than a day after it was announced.
“While investor interest was strong for this offering, we are unwilling to sell securities at prices that do not reflect the value we have created at Weatherford,” the company said in a statement. “The company continues on its resolute course of focusing on its core businesses and the efficiency of its operations, [and] to deliver positive free cash flow in 2015 and years beyond, [and] has ample liquidity and remains focused on generating strong returns for our shareholders.”
After the initial announcement Sept. 21, Weatherford (NYSE: WFT) shares took a 17 percent nosedive to $8.41. Within hours, word had spread that the company had reconsidered the proposal. On Tuesday, Weatherford’s shares began to ascend, reaching $9.18, an improvement of almost 9 percent from the previous day’s closing.
The $1 billion offering of common equity and mandatory convertible shares was designed to fund potential acquisitions and cover general corporate accounting. At Evercore ISI, analyst James West told investors in a Tuesday note that the potential acquisitions were likely Halliburton’s drilling service assets.
With more than 56,000 employees, Weatherford is one of the largest global oilfield services companies. It is based in Switzerland, but has several corporate offices in Houston.