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SONGA - Agreement to combine with Transocean

15/08-2017 08:30:56: (SONG) Songa Offshore SE : Agreement to combine with Transocean through a recommended voluntary exchange offer











Limassol, 15 August 2017



Songa Offshore SE ("Songa Offshore" or the "Company", Oslo Børs: "SONG") hereby announces an agreement with Transocean Ltd. ("Transocean", NYSE: "RIG") whereby the parties have agreed to seek to complete a business combination (the "Combination"), to be effected by Transocean (itself or through a wholly owned subsidiary) making a recommended public voluntary exchange offer for the entire share capital of Songa Offshore (the "Offer").



The Offer will be made for an offer price of NOK 47.50 per Songa Offshore share (the "Offer Price") to be settled in shares, convertible bonds and cash as set forth below. The consideration implies an equity value of Songa Offshore on a fully diluted basis of approximately NOK 9.1 billion, and an enterprise value of approximately NOK 26 billion. The Offer Price represents a 39.7% premium to Songa Offshore's closing share price on 14 August 2017 and a 47.1% premium to the three-month volume weighted average stock price on 14 August 2017. The terms of the Combination imply an exchange ratio between Songa Offshore and Transocean of 0.7145.



As part of the Combination, Songa Offshore and Transocean have discussed the future strategy of the Songa Offshore assets and organisation. The intention is for the combined company to establish a Harsh Environment Center of Excellence in Norway to serve the North Sea and other external harsh environment markets.



"The combination of Songa Offshore and Transocean is a strategic fit. The combined company will have an unparalleled backlog backed by strong counterparties. By adding Songa Offshore's four Cat-D rigs to Transocean's existing harsh environment fleet, the combined company will be the leader within this segment which is showing signs of recovery ", said Mr. Frederik W. Mohn, Chairman of Songa Offshore.



"The acquisition will strengthen Transocean's position as the leading offshore driller with exposure to deep- and harsh-water markets. Upon closing, Transocean will add four high specification harsh environment floaters, in addition to three legacy mid-water harsh environment rigs. In addition to contributing approximately USD4.1 billion in backlog, the transaction is expected to be immediately accretive to Transocean's earnings. The combined company will have a fleet of 53 rigs, comprised of ultra-deepwater drillships, harsh environment semis and deep- and mid-water semisubmersibles, combined with 9000 employees", said Mr. Jeremy Thigpen, CEO of Transocean.



As part of the entering into of the Combination Agreement, the board of Songa Offshore has after careful review of the Combination rationale and terms and conditions resolved to recommend its shareholders to accept the Offer. Such recommendation will be published in due course, together with the publication of the offer document for the Offer. In connection therewith, the Songa Offshore board has appointed ABG Sundal Collier ASA as independent financial advisor. ABG Sundal Collier ASA have issued a fairness opinion regarding the Offer to the Songa Offshore board.



Perestroika AS, Songa Offshore's largest shareholders, will through the Offer become Transocean's largest shareholder, with a holding of shares and rights to shares equal to approximately 12% of the combined entity on a fully diluted basis. Perestroika has accepted a 12-month lock-up on the Consideration Shares to be received by it. As part of the Combination, it has been agreed that the Transocean Board will nominate Mr. Frederik W. Mohn, chairman of Songa Offshore, to serve as director on the Transocean Board.