Feb 9 (Reuters) - Oilfield services provider C&J Energy Services Inc cut the cash portion of its offer to buy Nabors Industries Ltd's well maintenance business by $250 million after oil prices halved since the deal was announced in June.
The cash-and-stock deal was valued at $2.86 billion when it was announced on June 25.
With the cash component of the offer reduced to $688 million, the deal is now valued at about $1.45 billion based on C&J Energy's Friday closing price of $12.25, according to Evercore ISI analyst James West.
Up to Friday's close, C&J Energy's stock had fallen more than 60 percent since the deal was announced, while Nabors' stock had fallen about 55 percent.
C&J Energy said in June it had a funding commitment of $1.3 billion from Citigroup to finance the deal and to refinance existing debt. The amount to be borrowed will fall as a result of the lower cash offer, C&J said.
"Our combined company will have more liquidity, lower leverage and a stronger balance sheet, which are critical, especially during a challenging time for our industry", Chief Executive Josh Comstock said in a statement.
A 50 percent fall in oil prices over the past seven months has prompted oil producers to slash capital spending, squeezing oilfield service providers such as Nabors and C&J Energy.
As part of the deal, Nabors will merge its well maintenance business with C&J Energy.
Nabors will own about 53 percent of the combined company, which will be managed by C&J Energy management.
C&J Energy said the companies were working toward closing the deal in March after a shareholders' vote. (Reporting by Anannya Pramanick in Bengaluru; Editing by Sriraj Kalluvila and Don Sebastian)