Bronco Drilling Company (NDAQ: BRNC) shares continued their decline after ISS Governance Services recommended a vote against the proposed merger with Allis-Chalmers Energy. The shareholder advisory service concluded that given the relatively strict sales process, increase in EBITDA estimates for the peer group, and a valuation analysis of the company, shareholders should vote against the proposed transaction.

The announcement by ISS Governance is a welcome message for Third Avenue Management - an activist shareholder that has been fighting the merger since its announcement. The 23.4% shareholder expressed its belief that the offer was undervalued several times in Schedule 13D filings with the SEC and may now have enough support to prevent the merger. Supporters include 12.8% holder Wexford Capital and 6.1% holder Alpine Associates.

Bronco Drilling Company provides contract land drilling and workover services to oil and natural gas exploration and production companies. As of February 29, 2008, the Company owned a fleet of 56 land drilling rigs, of which 45 were marketed and 11 were held in inventory. Bronco also owned a fleet of 59 workover rigs, of which 49 were operating and 10 were in the process of being manufactured. The Company also owned a fleet of 70 trucks used to transport its rigs.

Shares of Bronco Drilling dropped $0.09, or 0.56%, to $15.86 per share.

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