SUGAR LAND, Texas, June 10, 2024 /PRNewswire/ -- Noble Corporation
plc ("Noble") (CSE: NOBLE) (NYSE: NE) and Diamond Offshore
Drilling, Inc ("Diamond") (NYSE: DO) announced today that they have
entered into a definitive merger agreement under which Noble will
acquire Diamond in a stock plus cash transaction. As part of the
transaction, Diamond shareholders will receive 0.2316 shares of
Noble, plus cash consideration of $5.65 per share for each share of Diamond stock,
representing an 11.4% premium to closing stock prices on
June 7, 2024. Upon closing, Diamond
shareholders will own approximately 14.5% of Noble's outstanding
shares.
Noble's President and Chief Executive Officer, Robert Eifler, said, "This acquisition
enables Noble to continue our journey of delivering superior
innovation and value to a broad range of the leading offshore
operators across the world. Our position will be strengthened with
the addition of four 7th generation drillships and one
of the most high-spec harsh environment semisubmersible rigs in the
world. Additionally, Diamond's five conventional deepwater
and midwater rigs have averaged above 85% utilization over the last
3 years and currently have strong forward contract coverage.
Supported by Diamond's $2.1 billion
of backlog and $100 million of
anticipated cost synergies, we expect the transaction to be
immediately accretive to our free cash flow per share and
contribute to accelerated growth in our return of capital to
shareholders."
Diamond's President and Chief Executive Officer, Bernie Wolford, said, "This combination is an
ideal outcome that provides Diamond shareholders both immediate and
long-term upside potential as part of a more fully scaled platform
that can deliver customer and shareholder value on a through-cycle
basis, more visibly and accessibly, while gaining access to Noble's
robust dividend program. Noble's operational strength,
service posture and proven integration capabilities make this a
natural match for Diamond. I would like to thank the entire Diamond
team for delivering terrific results for our customers and
shareholders. Your daily commitment to our uncompromising
standards will be a perfect fit within Noble, and we look forward
to continued success for our teams together on this strengthened,
world class platform."
Neal P. Goldman, Chairman of
Diamond, added, "I am very proud of what Diamond's employees,
executives and board have accomplished. We have created tremendous
value for our shareholders and customers that has culminated in a
strategic merger that will continue to add value for all."
Additionally, Noble today announced that its Board of Directors
has approved a 25% increase in its quarterly dividend to
$0.50 per share, starting with the
dividend which is to be paid in the third quarter of 2024.
Compelling Transaction Rationale, Synergies, and Value
Creation Potential for all Shareholders
- Highly complementary fleets and customer coverage: On a
combined basis, Noble's 14 working (15 total) dual BOP
7th generation drillships will comprise the leading tier
one drillship fleet in the industry. Additionally, the Ocean
GreatWhite will provide Noble with a high-spec floater capable
of operating in harsh environments, while the remaining five
semisubmersibles are expected to contribute meaningful contracted
cash flow. The combination creates strong commercial opportunities
with complementary customer bases around the world and across rig
types.
- Culture commonality around safety, operational excellence and
service posture: Noble and Diamond's shared commitment to these
foundational principles is expected to be a driving force toward a
successful and seamless integration.
- Robust combined backlog of $6.5
billion: Diamond's $2.1
billion backlog is both significantly accretive on a per
share and per rig basis, but also attractively priced and
structured, including an average backlog on the four 7th
generation drillships of approximately two years at $460,000 per day.
- Meaningful cost synergies: Noble expects to realize annual
pre-tax cost synergies of $100
million, with 75% expected to be realized within one year of
closing.
- Significantly accretive to free cash flow: The transaction is
significantly and immediately accretive to Noble's free cash flow
per share and will facilitate Noble's ability to further augment
our return of capital to shareholders.
Key Transaction Terms
- Under the terms of the merger agreement, Diamond shareholders
will receive 0.2316 Noble shares and $5.65 per share in cash for each Diamond share
(representing $600 million total cash
paid to Diamond shareholders on a fully-diluted basis). Following
the close of the transaction, Diamond shareholders will own
approximately 14.5% of Noble's shares on a fully-diluted basis.
- The implied cash and stock consideration to be received by
Diamond shareholders is $15.52 per
share, representing a premium of 11.4% to Diamond's closing share
price on June 7, 2024.
- Noble intends to fund the cash portion of the transaction
through new debt financing, which Noble has secured through a
$600 million committed bridge
financing facility.
- At closing, the Noble Board of Directors will be expanded to
include one member from the Diamond Board.
- The transaction is subject to the satisfaction of customary
closing conditions, including receipt of required regulatory
approvals and the approval of Diamond shareholders. The transaction
is expected to close by the first quarter of 2025.
- The transaction has been unanimously approved by the Board of
Directors of each company.
Noble – First Choice Offshore
Giving effect to the
acquisition, Noble will own and operate a fleet of 41 rigs
including 28 floaters and 13 jackups. Additionally, backlog for the
combined company would be approximately $6.5
billion as of today, with a wide diversity of customers and
regions of operation. With this expanded fleet and contracted cash
flow visibility, Noble will remain committed to maximizing value
for customers, employees and shareholders by delivering safe and
efficient operational results and maintaining a disciplined capital
allocation approach that prioritizes returning the significant
majority of free cash flow to shareholders.
Dividend Information
Today, Noble's Board of Directors
approved an interim dividend of $0.50
per share for the third quarter of 2024. This dividend is in
addition to the $0.40 dividend
previously announced which is expected to be paid on June 27, 2024 to shareholders of record at close
of business on June 6, 2024. The
$0.50 dividend is expected to be paid
on September 26, 2024 to shareholders
of record at close of business on September
12, 2024. The Company intends to continue to pay dividends
on a quarterly basis, and the third quarter dividend represents
$2.00 on an annualized basis.
Dividends payable to Noble shareholders will generally be paid
in U.S. dollars (USD). However, holders of shares in the form of
share entitlements admitted to trading on NASDAQ Copenhagen will
receive an equivalent dividend payment in Danish krone (DKK) as
determined by the exchange rate on a specified date. The holders of
such share entitlements bear the risk of fluctuations in USD and
DKK exchange rates.
Advisors
Morgan Stanley & Co. LLC is acting as
lead financial advisor to Noble and has provided committed
financing. Wells Fargo and SB1
Markets also advised Noble. Paul, Weiss, Rifkind, Wharton &
Garrison LLP is acting as legal advisor to Noble. Guggenheim
Securities, LLC and TPH&Co., the energy business of Perella
Weinberg Partners, are acting as lead financial advisors to
Diamond. Kirkland & Ellis LLP is acting as legal advisor to
Diamond.
Conference Call
Noble and Diamond have scheduled a
conference call and webcast to discuss this transaction on
Monday, June 10, 2024, at
10:00 a.m. U.S. Central Time.
Interested parties are invited to listen to the call by dialing
800-715-9871, or internationally 646-307-1963 using access code:
2355735, or by asking for the Noble Corporation conference call.
Interested parties may also listen over the Internet through a link
posted in the Investor Relations section of Noble's Website, which
will also include an investor presentation.
About Noble Corporation plc
Noble is a leading
offshore drilling contractor for the oil and gas industry.
The Company owns and operates one of the most modern, versatile,
and technically advanced fleets in the offshore drilling
industry. Noble and its predecessors have been engaged in the
contract drilling of oil and gas wells since 1921. Noble
performs, through its subsidiaries, contract drilling services with
a fleet of offshore drilling units focused largely on
ultra-deepwater and high specification jackup drilling
opportunities in both established and emerging regions
worldwide. For further information visit
www.noblecorp.com or email investors@noblecorp.com.
About Diamond Offshore Drilling, Inc.
Diamond Offshore
is a leader in offshore drilling, providing innovation, thought
leadership and contract drilling services to solve complex
deepwater challenges around the globe. Additional information and
access to the Company's SEC filings are available at
http://www.diamondoffshore.com.
Forward-Looking Statements
This communication includes
"forward-looking statements" within the meaning of U.S. federal
securities laws, including Section 27A of the Securities Act of
1933, as amended and Section 21E of the Securities Exchange Act, of
1934, as amended. You can identify these statements and other
forward-looking statements in this document by words such as
"expects," "continue," "focus," "intends," "anticipates," "plans,"
"targets," "poised," "advances," "drives," "aims," "forecasts,"
"believes," "approaches," "seeks," "schedules," "estimates,"
"positions," "pursues," "progress," "may," "can," "could,"
"should," "will," "budgets," "possible," "outlook," "trends,"
"guidance," "commits," "on track," "objectives," "goals,"
"projects," "strategies," "opportunities," "potential,"
"ambitions," "aspires" and similar expressions, and variations or
negatives of these words, but not all forward-looking statements
include such words. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain, such as
statements about the consummation of the pending transaction
between Noble and Diamond (the "Transaction"), including the
expected time period to consummate the Transaction, and the
anticipated benefits (including synergies and free cash flow
accretion) of the Transaction, and planned dividends. All such
forward-looking statements are based upon current plans, estimates,
expectations and ambitions that are subject to risks, uncertainties
and assumptions, many of which are beyond the control of Noble and
Diamond, that could cause actual results to differ materially from
those expressed in such forward-looking statements. Key factors
that could cause actual results to differ materially include, but
are not limited to the risk that regulatory approvals are not
obtained or are obtained subject to conditions that are not
anticipated by Noble and Diamond; uncertainties as to whether the
Transaction will be consummated on the anticipated timing or at
all, or if consummated, will achieve its anticipated economic
benefits; Noble's ability to integrate Diamond's operations in a
successful manner and in the expected time period; the possibility
that any of the anticipated benefits and projected synergies of the
Transaction will not be realized or will not be realized within the
expected time period; the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement; risks that the anticipated tax treatment of the
Transaction is not obtained; unforeseen or unknown liabilities;
customer, shareholder, regulatory and other stakeholder approvals
and support; unexpected future capital expenditures; potential
litigation relating to the Transaction that could be instituted
against Noble or Diamond or their respective directors; the
possibility that the Transaction may be more expensive to complete
than anticipated, including as a result of unexpected factors or
events; the effect of the pendency or completion of Transaction on
the parties' business relationships and business generally; risks
that the Transaction disrupts current plans and operations of Noble
or Diamond, as well as the risk of disruption of Noble's or
Diamond's management and business disruption during the pendency
of, or following, the Transaction; changes in commodity prices;
negative effects of the announcement of the Transaction, and the
pendency or completion of the Transaction on the market price of
Noble's or Diamond's common stock and/or operating results; rating
agency actions and Noble's and Diamond's ability to access debt
markets on a timely and affordable basis; decline in the price of
oil or gas, reduced demand for oil and gas products and increased
regulation of drilling and production, price competition and
cyclicality in the offshore drilling industry, offshore rig supply,
dayrates and demand for rigs, contract duration, renewal,
terminations and repricing, national oil companies and governmental
clients, contract backlog, customer and geographic concentration,
operational hazards and risks, labor force unionization, labor
interruptions and labor regulations, major natural disasters,
catastrophic event, acts of war, terrorism or social unrest,
pandemic, or other similar event, joint ventures as well as
investments in associates, international operations and related
mobilization and demobilization of rigs, operational interruptions,
delays, upgrades, refurbishment and repair of rigs and any related
delays and cost overruns or reduced payment of dayrates, impacts of
inflation, renewal of insurance, protection of sensitive
information, operational technology systems and critical data, the
ability to attract and retain skilled personnel or the increased
cost in doing so, supplier capacity constraints or shortages in
parts or equipment, supplier production disruptions, supplier
quality and sourcing issues or price increases, future mergers,
acquisitions or dispositions of businesses or assets or other
strategic transactions, hurricanes and windstorm damage, responding
to energy rebalancing, non-performance of suppliers or third-party
subcontractors, increasing attention to environmental, social and
governance matters, including climate change; the effects of
industry, market, economic, political or regulatory conditions
outside of Noble's or Diamond's control; and the risks described in
Part I, Item 1A "Risk Factors" of (i) Noble's Annual Report on Form
10-K for the year ended December 31,
2023 and (ii) Diamond's Annual Report on Form 10-K for the
year ended December 31, 2023, and, in
each case, in subsequent filings with the U.S. Securities and
Exchange Commission ("SEC"). Other unpredictable or factors not
discussed in this communication could also have material adverse
effects on forward-looking statements. Neither Noble nor Diamond
assumes an obligation to update any forward-looking statements,
except as required by law. You are cautioned not to place undue
reliance on any of these forward-looking statements as they are not
guarantees of future performance or outcomes and that actual
performance and outcomes. These forward-looking statements speak
only as of the date hereof. With respect to our capital allocation
policy, distributions to shareholders in the form of either
dividends or share buybacks are subject to the Board of Directors'
assessment of factors such as business development, growth
strategy, current leverage and financing needs. There can be no
assurance that a dividend will be declared or continued.
No Offer or Solicitation
This communication relates to
the Transaction between Noble and Diamond. This communication is
for informational purposes only and is not intended to and does not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, in any jurisdiction, pursuant
to the Transaction or otherwise, nor shall there be any sale,
issuance, exchange or transfer of the securities referred to in
this document in any jurisdiction in contravention of applicable
law. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and otherwise in accordance with
applicable law.
Important Additional Information
In connection with
the Transaction, Noble expects to file with the SEC a registration
statement on Form S-4 (the "Registration Statement") that will
include a proxy statement of Diamond and a prospectus of Noble (the
"Proxy Statement/Prospectus"). The Transaction will be submitted to
Diamond's stockholders for their consideration. Noble and Diamond
may also file other documents with the SEC regarding the
Transaction. The definitive Proxy Statement/Prospectus will be sent
to the stockholders of Diamond. This document is not a substitute
for the Registration Statement and Proxy Statement/Prospectus that
will be filed with the SEC or any other documents that Noble and
Diamond may file with the SEC or send to shareholders of Noble and
stockholders of Diamond in connection with the Transaction.
INVESTORS AND SECURITY HOLDERS OF NOBLE AND DIAMOND ARE URGED TO
READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS
REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ALL OTHER
RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT NOBLE AND DIAMOND, THE TRANSACTION, THE
RISKS RELATED THERETO AND RELATED MATTERS.
Investors and security holders will be able to obtain free
copies of the Registration Statement and the Proxy
Statement/Prospectus (when available) and all other documents filed
or that will be filed with the SEC by Noble and Diamond through the
website maintained by the SEC at http://www.sec.gov. Copies
of documents filed with the SEC by Noble will be made available
free of charge on Noble's website at
https://www.investors.noblecorp.com, under the "Investors"
tab, or by directing a request to Investor Relations, Noble
Corporation plc, 13135 Dairy Ashford, Suite 800, Sugar Land, Texas, 77478 , Tel. No. (713)
239-6507. Copies of documents filed with the SEC by Diamond will be
made available free of charge on Diamond's website at
https://investor.diamondoffshore.com under the
"Investor Relations" tab or by directing a request to Investor
Relations, Diamond Drilling, Inc.,
777 N. Eldridge Parkway, Suite 1100, Houston, Texas 77079, Tel. No. (281)
647-4035.
Participants in the Solicitation
Noble, Diamond, and
their respective directors and executive officers and other members
of management and employees may be deemed to be participants in the
solicitation of proxies in respect to the Transaction.
Information about the directors and executive officers of Noble
is set forth in: (i) Noble's proxy statement for its 2024 annual
meeting, including under the headings "Resolutions 1, 2 ,3, 4 ,5
,6, 7 & 8" and "Compensation Discussion and Analysis," filed
with the SEC on April 10, 2024 and
available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/1895262/000119312524091850/d807356ddef14a.htm, (ii)
Noble's Annual Report on Form 10-K for the year ended December 31, 2023, including under the headings
"Item 10. Directors, Executive Officers and Corporate Governance,"
"Item 11. Executive Compensation," "Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters," and "Item 13. Certain Relationships and Related
Transactions, and Director Independence," filed with the SEC on
February 23, 2024 and available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/1895262/000162828024006622/ne-20231231.htm,
(iii) Noble's Current Report on Form 8-K filed with the SEC on
March 15, 2024 and available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/949039/000119312524068298/d810669d8k.htm and
(iv) subsequent statements of changes in beneficial ownership on
file with the SEC.
Information about the directors and executive officers of
Diamond is set forth in Diamond's proxy statement for its 2024
annual meeting, including under the headings "Election of Directors
(Proposal No. 1)," "Compensation Discussion and Analysis,"
"Executive Compensation," and "Stock Ownership of Management and
Directors," filed with the SEC on March 28,
2024 and available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/949039/000119312524080696/d882683ddef14a.htm, (ii)
Diamond's Annual Report on Form 10-K for the year ended
December 31, 2023, including under
the headings "Item 10. Directors, Executive Officers and
Corporate Governance," "Item 11. Executive Compensation," "Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters," and "Item 13. Certain Relationships
and Related Transactions, and Director Independence," filed with
the SEC on February 28, 2024 and
available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/949039/000095017024022282/do-20231231.htm
and (iii) subsequent statements of changes in beneficial ownership
on file with the SEC.
Additional or updated information regarding the potential
participants and their direct or indirect interests (by security
holdings or otherwise) will be included in Noble's registration
statement on Form S-4, which will contain Noble's prospectus and
Diamond's proxy statement, and other relevant materials to be filed
with the SEC when they become available. These documents can be
obtained free of charge from the SEC's website at www.sec.gov.
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