Large Bronco Drilling (BRNC) Holder Third Avenue Management Said Allis-Chalmers Deal Undervalues The Co

January 28, 2008 5:10 PM EST

In a 13D filing on Bronco Drilling Co. Inc. (Nasdaq: BRNC) after the close Friday, 21% shareholder Third Avenue Management disclosed a letter to the company saying the merger with Allis-Chalmers Energy ( (NYSE: ALY) is not in the best best interests of shareholders. The firm intends to take action to oppose the merger. The firm said the deal undervalues Bronco Drilling.

Third Avenue Management recommends the Board; Fully consider all other unsolicited bids it may receive, Consider other alternatives to a sale, Reevaluate the structure and terms of the existing deal.

On 1/24, Bronco Drilling agreed to be acquired by Allis-Chalmers in a deal worth approximately $437.8 million, comprised of (a) an aggregate of $280.0 million in cash and (b) Allis-Chalmers common stock having an aggregate value of approximately $157.8 million.

Third Avenue Management was founded by veteran value investor Martin J. Whitman in 1986. Since its founding, the firm has pursued a sole discipline of fundamental value investing.

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13Ds
Mergers and Acquisitions

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• Third Avenue Management

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