Weatherford Shareholders Approve Relocation to Ireland - Analyst Blog

Oilfield services giant Weatherford International Ltd.'s WFT announced that its shareholders have approved the relocation of its legal domicile to Ireland from Switzerland. The approval was received at an Extraordinary General Meeting of Shareholders at which over 98% of the shareholders voted in favor of the proposal.  Also, Weatherford Switzerland merged with the company, to form a new public holding – Weatherford International plc.

The new company would assume the role of a publicly traded parent of Weatherford's companies. It would continue to report to U.S. securities regulators. Along with the merger, Weatherford's shares have been delisted from the NYSE Euronext Paris. The company also announced that it would delist its shares from the SIX Swiss Exchange.

The incorporation under the Irish law will strengthen Weatherford's activities and facilitate operations at the lowest possible cost. It will also boost the company's ability to rapidly and efficiently progress on its transformational path. The move will enable the company to retain and further attract the finest personnel in the industry.

The company's strategy emphasizes on expansion of its core businesses and selling off its non-core assets. Weatherford's future success rests on successful execution of its planned divestitures.

For years, the Swiss law has given investors an advantage in corporate affairs. For example, one rule allows investors to expel directors without giving a cause if they gather two-thirds of shareholder voting rights. Per the company, these rules could lead to confusing and conflicting proposals to its shareholders and contradict the disclosures on pay in U.S Securities and Exchange Commission. Therefore, Weatherford has decided to conduct its annual general meeting in Sep 2014, as an Irish company.

Weatherford carries a Zacks Rank #2 (Buy). Meanwhile, one can also consider other players in the oil and gas industry like Pioneer Energy Services Corporation PES, Nabors Industries Ltd. NBR and Patterson-UTI Energy Inc. PTEN. Pioneer Energy Services sports a Zacks Rank #1 (Strong Buy), while Nabors and Patterson-UTI Energy carry a Zacks Rank #2.
 

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