Jan 23 Pamplona Capital Management, holder of 9.3 percent of Nabors Industries Ltd, has become "increasingly concerned" about the underperformance of the drilling rig contractor's shares, according to a regulatory filing on Wednesday.
Nabors shares jumped as much as $1 per share, and closed 3 percent higher at $16.30 on the New York Stock Exchange. The stock is still down 16 percent in the past year, whereas rival Helmerich & Payne has gained 1 percent in the same time.
Pamplona, a fund backed by Russian billionaire Mikhail Fridman's Alfa Group, said it had "valuable insights" to contribute to the development of Nabors' business.
Alfa, which had $1.5 billion in the $6 billion London-based hedge fund Pamplona as of last year, owns a stake in Russian oil venture TNK-BP that is now being sold. Plus, an Alfa unit plans to buy 28.6 percent of Regal Petroleum.
Pamplona was detailing its 8.8 percent Nabors stake, in addition to another 0.5 percent of Nabors owned by Pamplona founder Alex Knaster, because of a $120 million margin loan facility arranged in October that is tied to its Nabors holding.
The fund and Knaster intend to continue talking to the Nabors management, according to the filing with the U.S. Securities and Exchange Commission.
Nabors did not immediately respond to request for comment.
The company has been burned by its heavy exposure to the once-booming hydraulic fracturing market, which has seen a dramatic reversal in the past year as the glut of North American natural gas forces drillers to sit on their hands.
Nabors Chief Executive Tony Petrello has spent his first year in the top job trying to shape up the Bermuda-based company, and has said he is aiming for $1 billion of asset sales this year to meet a debt reduction target.
The Pamplona filing made a splash in the options market, with website optionMonster reporting heavy trade in February calls for Nabors shares with a $16 strike price.
Last June, Pamplona hit the headlines when it bought 5 percent of UniCredit, Italy's biggest bank.