Expro Insurgents Raise White Flag

Hedge funds Mason Capital Management and Sandell Asset Management have spent the past week fighting the good fight against board obstinance at UK oilfield services firm Expro International. But now they’ve lost, and had little other choice but to capitulate.

Mason and Sandell had been publicly asking Expro to postpone proceedings on a £1.8 billion buyout offer from Candover, AlpInvest and Goldman Sachs. Why? Because U.S. rival Halliburton had said that it would offer 10 pence more per share, but that it needed a bit more time.

Expro had been dismissive of the Halliburton approach, and said that the Candover-led bid faced fewer execution risks and was generally superior (except for that pesky pricing issue). Mason and Sandell brought the matter to the London High Court and initially got what amounted to a two-day stay of (deal) execution. Today, however, they lost the larger point when the court refused to re-open the auction process.

Less than an overnight later, Mason and Sandell reportedly have sold their shares to the private equity consortium. It doesn’t look like they had alternate recourse, but it’s still disappointing to see someone give in when they’re in the right…

And, yes, I know how unusual it is for me to be siding with hedge funds (let alone ones that are effectively betting on Halliburton). So save this one for posterity.