--Transocean bids for Aker Drilling at a 62% premium
--Transocean is offering NOK26.50 a share, valuing the equity at
$1.43. Transocean will also assume $800 million in debt
--Deal is positive news to the oil services sector and helped
boost some other drillers Monday
(Adds company and analyst comments of deal, sectoral
implications in paragraphs 7-11)
By Katarina Gustafsson
DOW JONES NEWSWIRES
Aiming to supplement its fleet in the arctic, U.S. drilling
giant Transocean Ltd. (RIG) said Monday it plans to acquire
Norwegian drilling rig operator Aker Drilling ASA (AKD.OS) for
$1.43 billion in cash.
Under the transaction, Transocean, which owned the rig at the
center of last year's catastrophic Gulf of Mexico oil spill, has
made a voluntary 26.50 kroner ($4.83) per-share cash offer for all
outstanding shares in the company.
Transocean said early Monday that Aker Capital, a wholly owned
subsidiary of majority holder Aker ASA (AKER.OS), and other
shareholders representing 60.5% of the outstanding shares, have
committed to selling their shares to Transocean. A subsequent Aker
news release later Monday said Transocean had acquired 8.7% of
issued shares and has irrevocable acceptances for 67.6% of Aker's
shares.
The offer price represents a 62% premium to Aker Drilling's
30-day average price of NOK16.39 a share, Transocean said. The
transaction will be funded using existing cash balances and debt
facilities. Transocean is also assuming $800 million in Aker
Drilling debt, lifting the total value of the deal to $2.23
billion.
Transocean said the Aker Drilling acquisition would contribute
about $1 billion in contract backlog and would be "immediately
accretive" to its earnings. Aker operates two of the world's most
sophisticated deepwater drilling units and has two other
ultra-deepwater drillships under construction in South Korea.
Transocean's most recent earnings plummeted 78% following lower
utilization of its drilling fleet. The company continues to spar
with BP PLC (BP) in the aftermath of last spring's Deepwater
Horizon disaster which killed 11 people and produced a massive oil
spill. The accident has spurred lawsuits.
Transocean Chief Executive Steven Newman said the Aker assets
would "enhance our position in Norway where we have enjoyed a
long-term presence."
Aker Chief Executive Øyvind Eriksen said the company looked at
"several alternatives featuring interesting market participation"
in anticipation of possible consolidation, but picked Transocean
because the cash offer was "good for Aker Drilling and all
shareholders."
The Transocean acquisition gave a boost Monday to oil services
companies, especially to other drillers that could become
acquisition targets.
"It's positive that the world's largest drilling company has
such a positive view on the drilling market that they are prepared
to do buys," said analyst Kjetil Garstad at Arctic Securities.
Garstad said shallow-water jackup rigs could be next in line to
be acquired, mentioning companies like Standard Drilling PLC
(SDSD.OS)and Prospector Offshore Drilling S.A. (PROS.OS). Standard
Drilling shares were up 7% to NOK5.35 Monday. Prospector jumped
11.6% to NOK8.15 at 1120GMT.
Morgan Stanley and Fearnley Fonds/Fearnley Offshore are acting
as financial advisors to Transocean Services and Wikborg Rein is
acting as legal advisor to Transocean Services.
Shares in Aker Drilling Monday shot up 95% higher to NOK26.00
following news of the offer.
-By Katarina Gustafsson, Dow Jones Newswires +46-8-5451-3097;
katarina.gustafsson@dowjones.com
(Gustav Sandstrom contributed to this report)