After two veterans in the oil industry pushed for a merger earlier this week, the former competitors are once again clashing heads over a reported argument over price.
Halliburton, the world's second biggest oilfield services provider approached Baker Hughes, the world's third several weeks ago and is now wanting to nominate its own director for the combined company at a meeting scheduled April next year, as confirmed by Baker Hughes, though it did not disclose Halliburton's proposed price.
"I am very disappointed by your complete unwillingness to show any flexibility on your initial value proposal," Baker Hughes Chief Executive officer Martin Craighead wrote to Halliburton CEO Dave Lesar on Nov. 12, according to a letter published on its website.
Craighead wrote a letter to to Lesar asking him to raise his offer lest he will take its bid directly to shareholders instead.
"Your intransigence is not a reasonable response," Craighead wrote to Lesar in the Nov. 12 letter complaining about Halliburton's sub par offer and pushing itself too far with Baker Hughes board.
In its statement, Baker Hughes advised its shareholders the Halliburton offer undervalued the company and that they shouldn't "take any action at this time."
Baker Hughes claims that Halliburton's efforts at coercive tactics instead of willingly negotiating a reasonable value for the company's stock though they already said that they have enough room to raise their offer, are attempts to takeover both sides of the negotiation.
Should the merger push through, Halliburton is "turning a foe into a friend," eliminating competition, and making it easier for both companies to cope with the sustained market decline.
Halliburton seeks the technological expertise of Baker Hughes to develop its aging wells while Halliburton also get a part of Baker Hughes' oil tools business.
Combined, the companies would dominate the $25 billion U.S. onshore fracking market with a whopping 39 percent market share, more than double the size of its next competitor and world's number one oilfield services provider, Schlumberger, according to Spears & Associates.
