Allis-Chalmers paying more for Bronco Drilling

Jeffrey Freedman, vice president of investor relations at Allis-Chalmers, said the agreement was changed to make it a "more tax-advantageous deal" for Bronco Drilling shareholders and also to reduce the amount that Allis-Chalmers would have to borrow from about $300 million to about $200 million.

In January, the companies said Bronco Drilling shareholders would receive $16.33 per share, including an aggregate cash payment of $280 million.

Under terms of an amended agreement, Bronco Drilling stockholders will receive $200 million in cash and 16.8 million shares of Allis-Chalmers common stock for a price of $18.25 per share of Bronco Drilling.

Upon completion of the amended agreement, which as of midday is worth nearly $35 million more than the earlier deal, stockholders will own about 68 percent and 32 percent, respectively, of the combined company, the companies said.

Previously, the companies expected that Allis-Chalmers' and Bronco Drilling's stockholders would own about 72.1 percent and 27.9 percent, respectively.

The deal, which must be approved by shareholders of both companies, is expected to close in the middle of this year.

Allis-Chalmers stock was down 91 cents, or 5.3 percent, to $16.26 in midday trading.

Bronco Drilling shares fell 72 cents, or 3.9 percent, to $17.47.