But again, the opposition/dissent that is now increasing on the NWA side must be considered collectively as a potential problems for the companies from this point forward.

W-H Energy Services, Inc. (WHQ) - Smith International, Inc. (SII)

This publication continue to anticipate DOJ approval without much difficulty and a successful deal completion in October of this year. However, this assessment could easily change if the companies fail to deal with the union problems over the course of the next few months.

The deals in this sector have become among the most consistent and predictable of any industry over the years. This deal will be no different with respect to timing. In terms of competition issues, WHQ is essentially a "directional driller" in industry terms, which is a rapidly growing specialty service that provides angular drilling as opposed to traditional vertical drilling from a rig. Directional drilling is considered environmentally preferable to traditional methods as it tends to create far less damage to the physical area being drilled by providing drilling routes around obstacle, rather than through them.

The key for this deal is that SII currently does not offer the directional drilling services offered by WHQ. In the company's annual report, the following is used to describe WHQ's competitive landscape:

"Competitors in our logging-while-drilling business include divisions of Baker Hughes, Halliburton, Schlumberger and Weatherford International. In our other businesses, our competitors include the major integrated oilfield service companies and both small and large independent oilfield service companies."

Thus, unlike the previous GRP-NOV deal where some direct overlaps resulted in a very brief HSR delay, this transaction will be completely safe from FTC/DOJ interest and will in all likelihood receive early termination in the HSR review.

The SEC proxy review will determine the timing to completion of this deal. WHQ's recent history includes one amended annual report in 2006 and no late filings of either annual or quarterly reports. The company re-filed its S-1 in 2001, after initially filing in 1997. This is not a critical determining factor, but does indicate the SEC may have some familiarity with the company going into the merger proxy review.

As with every energy-sector merger transaction, SEC reviews can be difficult to predict as these deals are randomly selected for full reviews on occasion for no reason other than inexperience by SEC staffers. The last four transaction in this sector have escaped SEC delays, so there seems to be a fairly high chance this deal will not encounter major problems as well. Assuming the SEC does not pull the merger proxy and conduct a long review (+60 days), the companies should be able to complete this transaction by late-September, or no later than early-October 2008.

HLTH Corporation (HLTH) - WebMD Health Corp. (WBMD)

Last week, HLTH announced the sale of an operational unit (ViPS) to General Dynamics, which appears to be the primary factor the delay in the merger proxy filing for this transaction. The companies are now indicating, subsequent to the ViPS sale, a deal close in September of this year.

Since there are no regulatory or other matters with respect to timing in this situation, the proxy review remains the only relevant issue. The companies have not yet offered any solid estimate on the first proxy filing despite repeated attempts to obtain a status report.

Nevertheless, the September closing projection obviously contemplates SEC clearance at some point in August, which will require the first proxy statement to be filed within roughly the next three weeks. As discussed initially, this transaction is vulnerable to a fairly lengthy SEC review given the nature of the transaction and HLTH's recent history with the regulator. It was pointed out in February that a potential shift in the SEC's review habits could increase the chances of a fairly long proxy review in this case, and that shift has indeed occurred over the last four months.

In short, if the companies fail to complete and file the initial proxy statement before the end of this month, a September close will be severely compromised.

Huntsman Corporation (HUN) - Hexion Specialty Chemicals

The European Commission has extended its provision review deadline for this transaction until June 30, 2008.

This is a somewhat surprising development on in that the shorter of two extensions has been issued in this case, rather than the four-month extension which was anticipated. It is fairly uncommon for the EC to impose a secondary extension after short extension -- in fact, there is no deal of reference for this sort of activity from the EC in the database. In other words, virtually every deal receiving a two-week extension is conditionally or unconditionally proved by the second deadline.

However, this is very clearly a case in which a short review extension may be inadequate for the EC reaching a final decision. The current extension, as noted by the regulator, is to allow third parties involvement in the remedy consideration. This, along with the oft-repeated assessment that the combination is highly complex, suggests the EC review is subject to a long review extension and/or a review suspension, which occurs occasionally with this regulator.

While the current expectation is that the EC will not approve this transaction before the end of this month, it must be pointed out that the extremely lengthy pre-notification period in this case has certainly benefitted the companies efforts and may very well be the factor that allows this transaction to receive both HSR and EC approval at the end of the day.

EDS has filed the initial proxy statement for this transaction with the SEC.

The proxy discloses that an HSR notification was filed on May 28, 2008. This creates a waiting period expiration date of June 26, 2008. As detailed previously, there is virtually no chance of DOJ/FTC interest in this case due to the presence of IBM as EDS' primary competitor and the very low, fragmented market shares in the IT outsourcing field.

Electronic Data Systems (EDS) - Hewlett-Packard (HPQ)

 

The proxy also identifies the following non-U.S. regulatory requirements:

"(A) decision under the EC Merger Regulation (or application of Article 10(6) thereof), declaring the merger to be compatible with the EC Common Market; and certain other clearances or approvals under applicable foreign antitrust, competition or fair trade laws, including, but not limited to, the laws of South Africa, Israel, China, Argentina, Canada, Russia, Switzerland and Taiwan."

None of the above regulators is currently anticipated to have issues with this transaction, although it will be noted that Israeli regulators tend to have fairly lengthy reviews (+/- 70 days) regardless of the nature of any given transaction. This could potential generate some delays in the future, but not the type of delays that should be considered significant.

The SEC proxy review continues to be viewed as the key timing factor for this deal. With the relatively quick first proxy filing, the companies should have very little difficulty completing the transaction before the end of August, assuming the SEC clearance is obtained in less than 60 days as anticipated.

Safeco Corporation (SAF) - Liberty Mutual Group

The California DOI accepted the companies' Form A for review on May 20, 2008.

The DOI is subject to a statutory 60-day deadline, although these deadlines are routinely waived or extended in Form A reviews, particularly in major cases such as this one. Thus, the current review deadline is July 18, 2008. This is, of course, a tentative date in this particular review.

Form A hearings are held in California at the discretion of the DOI Commissioner. As of this entry, the Commissioner has not determined if a hearing will be required. The primary motivation for holding a Form A hearing is intervention from third parties, as is standard in most states. The DOI has to this point given no indication of intervention at a high level.

In sum, the DOI review will very likely extend beyond the current deadline into August of this year along with the Washington OIC review. California remains considered a key approval for this deal, but will very likely become a secondary timing factor behind the Washington Form A review.