Dip Buyers Pick Up Weatherford (WFT) Pieces, But Halliburton (HAL) May Just Buy the Entire Company
In its intra-day upgrade of Weatherford International Ltd. (NYSE: WFT), FBR Capital said they believe Halliburton (NYSE: HAL) or another large-cap player could be interested in buying the company for its artificial lift business which the firm calls "very attractive."
FBR notes that Weatherford is the purest play on artificial lift and Halliburton does not have an artificial lift business. Halliburton previously made a run at John Wood Group, the fifth-largest player in the artificial lift business.
"We would not be surprised to see Halliburton move to acquire Weatherford, although the unsettled Foreign Corrupt Practices Act (FCPA) probe presents a roadblock for the time being."
Shares of Weatherford are down 8% in afternoon action, but well off the days lows.
Weatherford was slammed today after delaying their 10-K, citing "material weakness" in its internal controls over financial reporting for income taxes The company also sees $500 million in restatements for the 2007-10 financials by roughly $500 million (essentially all non cash). Weatherford also said its prior guidance for a 20% effective tax rate in 2011 should no longer be relied upon.
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