Wexford Capital Continues To Oppose Bronco Drilling (BRNC) Merger

August 4, 2008 5:54 PM EDT

In an amended 13D filing on Bronco Drilling Co. Inc. (Nasdaq: BRNC), large shareholder Wexford Capital disclosed more correspondence related to their opposition to the merger with Allis Chalmers (NYSE: ALY).

Wexford said they were surprised by Bronco's press release on Friday August 1 which announced the recommendation by Glass Lewis & Co. regarding the merger.

Wexford said said Bronco appears to be selectively disclosing information, noting: 

- Bronco trumpets the Glass Lewis recommendation, but ignores the July 31 report by Proxy Governance, Inc. (another independent, proxy advisory firm), which recommended that Bronco shareholders vote against the deal because they believe the merger undervalues Bronco and fails to offer a meaningful takeover premium.

- Bronco also fails to disclose the July 31 research report by FBR Capital Markets, which upgraded Bronco’s stock to "outperform," based on FBR's view that the merger undervalued Bronco and would likely be rejected to Bronco’s shareholders.

- Bronco hasn't advised its shareholders that three of its largest shareholders have stated that they are opposed to the merger.

- Bronco's use of the Glass Lewis violates express prohibitions on the use of the analysis to solicit proxies and on reproducing any portion of the report without permission.

- Bronco selectively quotes from the Glass Lewis report, creating the misleading impression that Glass Lewis enthusiastically endorsed the sale process and merger. In fact, the Glass Lewis report expressed concerns about both the sale process and the valuation.

- Bronco's Q2 earnings announcement also appears to reflect this issue of selective disclosure, and the decision not to conduct a quarterly call deprives shareholders and analysts the opportunity to question management regarding issues raised in the announcement.

Link to August 4th Letter from Wexford

Link to E-Mail from Wexford

Related Categories

13Ds
Mergers and Acquisitions

Stocks Mentioned

Related Entities

• Wexford Capital

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