September 6, 2013 / 3:51 PM / 4 years ago

UPDATE 1-Oil States sells tubular services business for $600 mln

* Sells the business to Marubeni-Itochu Tubulars America Inc

* Raises share buyback program to $500 mln from $200 mln

* Shares rise 3 pct

Sept 6 (Reuters) - Oilfield services provider Oil States International Inc said it sold its casing and tubing business to a private company for $600 million, a day after activist investor Jana Partners LLC disclosed a higher stake in the company.

Oil States expects to use the proceeds to fund its increased share repurchase program and to repay debt. The company on Friday raised its share buyback program to $500 million from $200 million.

Shares of the company rose 3 percent to $96.88 in late morning trade on the New York Stock Exchange.

Oil States said the sale would help it invest in its accommodations, well-site services and offshore products businesses.

The company said in May it was considering spinning off its accommodations business, which provides housing for energy industry workers in remote locations in Canada, the United States and Australia.

Oil States sold the business to Marubeni-Itochu Tubulars America Inc, a unit of Japan’s Marubeni-Itochu Steel. Marubeni-Itochu Steel is jointly owned by trading houses Marubeni Corp and Itochu Corp.

Jana Partners, headed by Barry Rosenstein, raised its stake in Oil States to 11.7 percent from 9.1 percent, according to a regulatory filing on Thursday.

Oil States’ tubular business, Sooner Inc, distributes casing and tubing used in drilling and completion of oil and natural gas wells primarily in North America.

Pricing for tubular services fell in 2012 and has remained depressed this year due to higher imports and rising domestic capacity.

Revenue at the business fell 12 percent in the second quarter, but still accounted for nearly 40 percent of Oasis’ total quarterly revenue of $1.04 billion.

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