Options to acquire National Oilwell Varco Inc. shares over the next two weeks surged on Wednesday as the biggest U.S. maker of oilfield equipment hunts for deals during the worst downturn in a generation.
The volume of call options rose to 14,559 as of 2:40 p.m. in New York, compared with the 20-day average of 2,534, according to data compiled by Bloomberg. The most-active contract, which would expire on Friday, offers the right to purchase shares at $34.50. The second-most active was the $34.50 call expiring on Aug. 19. Shares fell 2.5 percent to $33.32.
The Houston-based maker of oilfield gear, including rigs, pipes and blowout preventers, plans to continue looking for smaller acquisition targets while considering larger ones, Chief Executive Officer Clay Williams said last month.
Spending on acquisitions this year fell 18 percent to $36 million as compared to a year earlier, according to a federal filing. It announced a deal to buy a fracking tools business from Trican Well Service Ltd. in June for an undisclosed amount. A month later, National Oilwell Varco formed a pact with GE Oil & Gas to work together on gear for floating production storage and offloading vessels.
"While investors are likely to retain appetite for larger, transformative deals, we expect M&A near-term will be confined to smaller bolt-ons within NOV’s ‘better owner’ framework," Sean Meakim, an analyst at JPMorgan, wrote July 28 in a note to investors.
Loren Singletary, a spokesman at National Oilwell Varco, declined to comment.
(Updates with response from company in final paragraph.)
To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net. To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Susan Warren
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