Hercules Offshore, Inc. Signs Definitive Merger Agreement to Acquire TODCO for $2.3 Billion in Cash and Hercules Common Stock
19 Março 2007 - 10:01AM
PR Newswire (US)
HOUSTON, March 19 /PRNewswire-FirstCall/ -- Hercules Offshore, Inc.
("Hercules Offshore", "the Company" Nasdaq: HERO) and TODCO
(NYSE:THE) today announced that they have entered into a definitive
merger agreement pursuant to which Hercules Offshore will acquire
100% of the outstanding stock of TODCO in a stock and cash
transaction valued at approximately $2.3 billion. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050601/DAW092LOGO ) The
Company expects the transaction will: -- Create the world's fourth
largest jackup fleet -- Establish Hercules Offshore as a leader in
both barge drilling and liftboats -- Expand Hercules Offshore's
geographic footprint, enhancing international growth opportunities
and further diversifying the Company's operations -- Provide for an
improved competitive position in the U.S. Gulf of Mexico with
greater economies of scale and increased operational flexibility --
Be accretive to earnings and cash flow per share -- Result in
financial flexibility for future growth initiatives The combined
company will operate a fleet of 33 jackup rigs, 27 barge rigs, 64
liftboats, three submersible rigs, nine land rigs and one platform
rig and have operations in ten different countries on five
continents. The boards of directors of Hercules Offshore and TODCO
unanimously approved the transaction. Closing of the transaction is
subject to regulatory approvals and other customary conditions, as
well as both Hercules Offshore and TODCO shareholder approval.
Randy Stilley, Chief Executive Officer, President and Director of
Hercules Offshore, stated, "This transaction positions Hercules
Offshore as one of the leading shallow water oil service providers
globally. We intend to leverage the strong organizations of both
Hercules Offshore and TODCO to create long- term value for our
companies' shareholders, customers and over 3,900 employees.
Looking forward, Hercules Offshore will continue to focus on
seeking strategic growth opportunities, expanding our geographic
diversity and maintaining our status as a low-cost provider, while
preserving our conservative and disciplined financial management."
Jan Rask, President, Chief Executive Officer and Director of TODCO,
commented, "We are very pleased with the signing of this agreement
with Hercules Offshore and believe this transaction maximizes value
for shareholders. Shareholders have an opportunity to realize cash
while continuing to participate in a robust offshore drilling
market through an entity with a balanced capitalization. In
addition, we believe the Hercules Offshore management team has
proven acquisition and integration capabilities and will continue
to capitalize on growth opportunities that exist in the fragmented
offshore jackup drilling market." Following the transaction, the
Hercules Offshore senior management team will continue, under the
leadership of Randy Stilley, to be governed by the Hercules
Offshore board of directors, which will include three TODCO
directors. In addition to Randy Stilley, the following persons will
comprise the Hercules Offshore senior management team upon closing
of the transaction: John Rynd Senior Vice President and Chief
Operating Officer Lisa Rodriguez Senior Vice President and Chief
Financial Officer David Crowley Senior Vice President, Marketing
and Technical Services Steve Manz Senior Vice President, Planning
and Corporate Development James Noe Vice President, General Counsel
J. Chris Bryan Vice President, Human Resources Transaction Details
Under the terms of the agreement, TODCO shareholders will receive
average total consideration equal to 0.979 shares of Hercules
Offshore and $16.00 in cash for each share of TODCO common stock
outstanding, or an estimated 56.9 million shares of Hercules
Offshore and cash of $930.7 million. This represents $42.01 per
share of consideration to be received by the TODCO shareholders
based on the closing price of Hercules Offshore on March 16, 2007,
and represents a premium of approximately 28% to TODCO's closing
price on March 16, 2007 and 25% to the average closing price over
the last 30 days. The exact amount of the cash and stock
consideration to be received by each TODCO shareholder will be
determined by elections and an equalization formula. It is
anticipated that the transaction will be tax free to TODCO and the
stock portion of the consideration will be received tax free by its
shareholders. Upon completion of the transaction, which is expected
to be in mid-2007, it is anticipated that TODCO shareholders will
own approximately 64%, and that Hercules Offshore shareholders will
own approximately 36% of the combined company. Hercules Offshore
will fund its acquisition of TODCO through existing cash on hand
and a senior secured term loan facility which has been underwritten
by UBS Investment Bank. The Company plans to use cash from
operations in the years ahead to expeditiously repay the fully
pre-payable term loan. Advisors UBS Investment Bank acted as lead
financial advisor, and Simmons & Company International acted as
financial advisor and provided the fairness opinion to the Board of
Hercules Offshore and Andrews Kurth LLC acted as principal legal
advisor to Hercules Offshore for this transaction. Citigroup
Corporate and Investment Banking acted as financial advisor and
Porter & Hedges LLC acted as principal legal advisor to TODCO.
Conference Call Hercules Offshore and TODCO's management will
conduct a conference call on March 19, 2007 at 9:00 am CDT (10:00
am EDT) to discuss the transaction. To participate in the
conference call by telephone, please call 10 minutes prior to the
scheduled start time, one of the following telephone numbers: (800)
261-3417 (Domestic) (617) 614-3673 (International) The access or
confirmation code is 65846886. The conference call will also be
broadcast live via the Internet. You may listen by accessing
Hercules Offshore's website at http://www.herculesoffshore.com/ or
TODCO's website at http://www.theoffshoredrillingcompany.com/. You
should connect to our website at least 15 minutes prior to the
conference call to register, download and install any necessary
audio software. If you are unable to participate, a replay of the
conference call will be available on Monday, March 19, 2007,
beginning at 11:00 a.m. CDT (12:00 p.m. EDT), through Monday, March
26, 2007. The phone number for the conference call replay is (888)
286-8010 or internationally (617) 801-6888. The access code is
95742734. Additionally, the recorded conference call will be
accessible through our respective websites for 28 days after the
conference call. About Hercules Offshore Headquartered in Houston,
Hercules Offshore operates a fleet of nine jackup drilling rigs and
64 liftboats. The company offers a range of services to oil and gas
producers to meet their needs during drilling, well service,
platform inspection, maintenance, and decommissioning operations in
shallow waters. About TODCO TODCO is a leading provider of contract
oil and gas drilling services with the largest fleet in the shallow
water U.S. Gulf of Mexico and along the U.S. Gulf Coast. TODCO's
common stock is traded on the New York Stock Exchange under the
symbol "THE". This news release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements
are subject to a number of risks, uncertainties and assumptions,
including the factors described in Hercules Offshore's most recent
periodic reports and other documents filed with the Securities and
Exchange Commission, which are available free of charge at the
SEC's website at http://www.sec.gov/ or the Company's website at
http://www.herculesoffshore.com/. Hercules Offshore cautions you
that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected or implied in these statements.
Risks with respect to the combination of Hercules Offshore and
TODCO, as well as other recent and future acquisitions, include the
risk that we will not be able to close the transaction, as well as
difficulties in the integration of the operations and personnel of
the acquired company, diversion of management's attention away from
other business concerns, and the assumption of any undisclosed or
other liabilities of the acquired company. We expect to incur
substantial transaction and merger related costs associated with
completing the merger with TODCO, obtaining regulatory approvals,
combining the operations of the two companies and achieving desired
synergies. Additional unanticipated costs may be incurred in the
integration of the businesses of Hercules Offshore and TODCO.
Expected benefits of the merger may not be achieved in the near
term, or at all. Hercules Offshore will have a significant amount
of additional debt as a result of the merger. This debt will
require us to use cash flow to repay indebtedness, may have a
material adverse effect on our financial health, and may limit our
future operations and ability to borrow additional funds. In
connection with the proposed transaction, Hercules Offshore will
file a Form S-4, TODCO will file a definitive proxy statement and
both companies will file other relevant documents concerning the
proposed merger transaction with the SEC. INVESTORS ARE URGED TO
READ THE FORM S-4 AND THE PROXY STATEMENT WHEN THEY BECOME
AVAILABLE, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE
MERGER. Investors may obtain a free copy of the Form S-4 and the
proxy statement (when available) and the other documents free of
charge at the website maintained by the SEC at http://www.sec.gov/.
Hercules Offshore and TODCO and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Hercules Offshore
and TODCO in connection with the merger. Information about the
directors and executive officers of Hercules Offshore and their
ownership of Hercules common stock is set forth in the proxy
statement for Hercules Offshore's 2006 Annual Meeting of
Stockholders filed with the SEC on March 24, 2006. Information
about the directors and executive officers of TODCO and their
ownership of TODCO common stock is set forth in the proxy statement
for TODCO's 2006 annual meeting, which was filed with the SEC on
March 22, 2006. Investors may obtain additional information
regarding the interests of such participants by reading the Form
S-4 and proxy statement for the merger when they become available.
http://www.newscom.com/cgi-bin/prnh/20050601/DAW092LOGO
http://photoarchive.ap.org/ DATASOURCE: Hercules Offshore, Inc.
CONTACT: Stephen M. Butz, Vice President and Treasurer of Hercules
Offshore, Inc., +1-713-979-9832; or Dale Wilhelm, Vice President
& CFO of TODCO, +1-713-278-6014 Web site:
http://www.herculesoffshore.com/
http://www.theoffshoredrillingcompany.com/
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