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Dawson Geophysical Co.,
Midland, Tex., terminated its proposed $157 million stock-swap merger with TGC Industries Inc., based in Plano, Tex. "The two companies could not come to agreement on an adjusted exchange ratio, and TGC was unable to obtain the 80% shareholder approval needed to move forward," said analysts in the Houston office of Raymond James & Associates Inc. Only 76% of TGC stockholders approved the deal. "One of the conditions of the merger was for Dawson's 10-day volume weighted average stock price to be within a range, which was not reached before the merger was to be completed," Raymond James analysts reported. "As a result, management of each company held a special meeting regarding an adjustment to the exchange ratio for the all-stock transaction." That was followed by special meetings of shareholders of the respective companies, in which Dawson shareholders affirmed the transaction but TGC shareholders did not. "We expected TGC to try for more value for their shareholders, but ultimately expected the deal to go through," said Raymond James analysts. "While we believed the transaction would be accretive, this is not the end of the world."
Dril-Quip Inc.,
Houston, named John Lovoi as chairman of its board and Blake DeBerry as president and chief executive officer, immediately effective as Mike Walker abruptly retired as chairman and CEO in late October. DeBerry also replaced Walker as a member of the board. James Gariepy was named senior vice-president and chief operating officer, also effective immediately.
Barclays Capital Equity Research analysts said, "While the news of Mike Walker's retirement is sudden, we believe this was a personal decision and not one that reflects any internal issues with the company." Indeed, Walker "is leaving the company in a good position. Dril-Quip's backlog is at record levels, and we expect the company will benefit from the ongoing new deepwater rig delivery cycle and the growth in the subsea business that we expect to continue for at least the next decade," the analysts said. Walker was the last of Dril-Quip's three founders and spent almost 31 years with the company. DeBerry has been with Dril-Quip since 1988, working 13 years in the company's Houston headquarters and running various international businesses in Asia for the last 10 years. He moved back to Houston in July as senior vice-president of sales and engineering. Lovoi has been a board member since 2005. James Gariepy has been with Dril-Quip since 2004, most recently as senior vice-president for project management and service.
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