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Delaware’s Supreme Court gives go-ahead to C&J merger with Nabors unit

Delaware’s Supreme Court gives go-ahead to C&J merger with Nabors unit

HOUSTON: C&J Energy Services Incorporation with a unit of Nabors Industries Limited, merger between oilfield services provider can proceed, Delaware’s Supreme Court ruled on Friday.

The court overturned an injunction from a lower court that said C&J should have sought more bids before agreeing to the $2.86 billion cash and stock deal in June. A retirement fund for employees of the city of Miami had asked for the injunction.

The court said the injunction was granted in error because all shareholders will have a chance to vote on the merits of the agreement, which plaintiffs said did not give adequate protections to C&J shareholders.

The deal has drawn the attention of tax experts tracking so-called inversions, in which US companies reincorporate abroad to cut their tax bills.

Further the court said the transaction is unusual as C&J, a US corporation, will acquire a subsidiary of Nabors, which is domiciled in Bermuda. But Nabors will retain a majority of the equity in the surviving company, which will be based in Bermuda to obtain more favorable tax rates.

Shares of C&J Energy Services ended up 5 percent at $14.33, while Nabors shares soared to close up 15 percent at $13.63 on the New York Stock Exchange.