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The Trinidad Drilling office in Nisku, Alta. on Tuesday, Feb. 17, 2014.AMBER BRACKEN/The Globe and Mail

Ensign Energy Services Inc. has launched a $470-million hostile takeover bid for Trinidad Drilling Ltd. two weeks after Trinidad concluded a formal search for a buyer with no deal.

Ensign, whose chairman and largest shareholder is London-based billionaire Murray Edwards, is offering $1.68 a share in cash for Trinidad, a rival oil and gas drilling contractor. That represents a premium of 20 per cent over Trinidad’s average price in the first 10 trading days of August.

Shares in Trinidad jumped 14 per cent to $1.72 on the Toronto Stock Exchange, reflecting some investor bets that a higher offer will emerge. However, the stock is below the levels of a year ago. Ensign said it had amassed 9.8 per cent of Trinidad shares before announcing its bid.

Including assumed debt, the deal is worth $947-million, Ensign said.

The offer is the latest of several hostile bids and activist approaches in the Canadian oil patch. The recovery in crude prices after three years of downturn has left stragglers with weakened stock prices, which are opportunities for more consolidation. Junior producer Iron Bridge Resources Inc. is the target of a $116-million unsolicited offer from Velvet Energy Ltd. In the oil services sector, Calfrac Well Services Ltd. has come under fire from its second-largest shareholder, Wilks Brothers LLC, for what Wilks contends are insufficient efforts to cut debt, and now the two are in a court battle.

Trinidad urged its shareholders to take no action on Ensign’s bid until its board releases more information. It did not say when that would be, or what its next moves might entail, such as searching for a white knight. It may be tricky, given its lengthy and fruitless formal search for a deal.

The company, which operates in Canada, the United States, Mexico and the Middle East, said on Aug. 1 that its six-month “strategic review” of alternatives had not yielded any offers that would mean higher value for the shareholders. As a result, its board said it would continue as a stand-alone company under a five-year operational plan. The shares slumped 13 per cent in the week after it ended the process.

Ensign, which didn’t participate in the process, approached Trinidad late on Saturday to discuss a deal at $1.68 a share, Trinidad said. Trinidad determined that the price was insufficient and not in the best interests of shareholders. But it offered to continue talks “on customary confidentiality terms, to better allow Ensign to understand the value of Trinidad and its business.”

Ensign said the target company had insisted on a lengthy stand-still agreement. Hostile-bid provisions in Canada dictate that offers remain open for 105 days.

“There is no practical reason for the Trinidad board to keep the offer outstanding for that long, precluding the Trinidad shareholders from realizing the premium and liquidity sooner,” Ensign said in a statement. “Trinidad has just concluded a strategic review process which did not uncover any viable opportunities.”

The offer fits the acquisition style of Mr. Edwards, an energy, aerospace and sports financier. Another of his holdings, Canadian Natural Resources Ltd., has often bought out-of-favour rivals and assets, most recently Royal Dutch Shell PLC’s oil sands operations and Cenovus Energy Inc.’s heavy oil business as crude prices remained under pressure in 2017.

Robert Tattersall, an investor and former fund manager who owns shares in both companies, said the deal is much more favorable for Ensign than for Trinidad. “If they were offering shares instead of cash, I might be somewhat more amenable, because it’s a more efficient combined company and then you capture some of the upside,” Mr. Tattersall said. “But here you get $1.68 cash at a time when the industry fundamentals and momentum are improving.”

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