Featured Company News – Songa Offshore SE to be Acquired by Transocean for Transaction Value of $3.4 Billion

Research Desk Line-up: RSP Permian Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 17, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Transocean Ltd (NYSE: RIG), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=RIG. The Company signed an agreement with Songa Offshore SE on August 15, 2017, pursuant to which Transocean will make a Voluntary Exchange Offer to acquire 100% of the issued and outstanding shares of Songa Offshore for a transaction value of approximately $3.4 billion. It also includes the shares issued before the expiry of the offer period as a result of the exercise of warrants, convertible loans, and other subscription rights. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

http://protraderdaily.com/register/

Discover more of our free reports coverage from other companies within the Oil & Gas Drilling & Exploration industry. Pro-TD has currently selected RSP Permian, Inc. (NYSE: RSPP) for due-diligence and potential coverage as the Company reported on August 07, 2017, its financial and operating results for Q2 2017 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on RSP Permian when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on RIG; also brushing on RSPP. Go directly to your stock of interest and access today’s free coverage at:

http://protraderdaily.com/optin/?symbol=RIG

http://protraderdaily.com/optin/?symbol=RSPP

The consideration will be based upon NOK 47.50 per share of Songa Offshore, indicating a 37% premium to Songa Offshore’s five-day average closing price of NOK 34.68 per share. The consideration implies an equity value of Songa Offshore on a fully diluted basis of around NOK 9.1 billion ($1.2 billion), and an enterprise value of around NOK 26.4 billion ($3.4 billion).

Benefits of the Transaction

Strengthens Transocean’s Position as Undisputed Leader in Harsh Environment: The agreement will strengthen Transocean’s industry-leading position with the addition of Songa Offshore’s four “Cat-D” harsh environment semisubmersible drilling rigs on long-term contracts with Statoil in Norway.
Generates Operational Synergies of $40 million: The transaction is expected to be accretive on an EBITDA, Operating Cash Flow, and Net Debt/EBITDA basis, and the Company anticipates annual expense synergies of around $40 million.
Increases Contracted Backlog by USD $4.1 billion to a combined total of USD $14.3 billion: The agreement will result in a combined company, operating a fleet of 51 mobile offshore drilling units with backlog of $14.3 billion consisting of 30 ultra-deepwater floaters, 11 harsh environment floaters, three deepwater floaters, and seven midwater floaters.

Approval of the Transaction

The transaction is supported by Songa Offshore’s Board of Directors and few senior management team members. Songa Offshore’s shareholders Perestroika AS (“Perestroika”), funds beneficially owned by Asia Research & Capital Management Ltd, and York Capital Management Global Advisors, LLC, which collectively own 76.6% of Songa Offshore’s outstanding shares, have executed irrevocable pre-acceptance agreements, to accept the Offer.

Additional Transaction Elements

The remaining Songa Offshore’s shareholders have the option to accept in accordance with Additional Transaction Elements.

Terms of the Offer to Songa Offshore’s shareholders:

Songa Offshore’s shareholders will receive consideration comprising of 50% Transocean’s newly issued shares and 50% in convertible bonds, exchangeable into new shares of Transocean.
The exchange ratio is equal to 0.7145 times, based on the Transocean’s Reference Price of $8.39 per share and a USD/NOK exchange ratio of 7.9239 as per close August 14, 2017.
Each Songa Offshore’s shareholder may elect to tender up to 2,631 Songa Offshore’s shares under the Offer for cash of NOK 47.50 per share, i.e. up to a total of NOK 125,000 in cash per Songa Offshore’s shareholder.

Terms of Transocean’s convertible bond: Convertible bonds of Transocean are unsecured and are issued at par. The bonds mature five years from issue and are exchangeable into shares of Transocean. They have a coupon of 0.5% per annum paid semi-annually. The Reference Price is USD $8.39 per share. The Exchange Price will be set at a 22.5% premium to the underlying Reference Price.

Leadership

As a result of the transaction, Transocean’s executive management team or corporate structure are anticipated to remain the same. Following the completion of the acquisition, the combined company’s Board of Directors will include Frederik Wilhelm Mohn, Chairman of the Board of Songa Offshore and owner of Perestroika AS, Songa Offshore’s largest shareholder. The Company will remain headquartered in Zug, Switzerland, with a significant operating presence in Houston, Texas, Aberdeen, Scotland, and Stavanger, Norway.

Agreement Strengthens Transocean’s Technical & Operational Presence in Norwegian Market

Jeremy D. Thigpen, President and CEO of Transocean, commented:

“Songa Offshore is an excellent strategic fit for Transocean. With this combination, we add four new state-of-the-art Cat-D semisubmersible rigs to our existing fleet, further enhancing our position in the harsh environment market. We also demonstrate our continued commitment to the Norwegian market and strengthen our technical and operational presence in that region. Importantly, we add approximately $4.1 billion in contract backlog to our already industry-leading backlog of USD $10.2 billion, which provides us with even more visibility to future cash flows in this challenging market.”

Combined Company will have Unparalleled Backlog Backed by Strong Counterparties

Commenting on the agreement, Frederik Wilhelm Mohn, Chairman of Songa Offshore, stated:

“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.”

Transaction Subject to Customary Conditions

The Transaction is expected to close in Q4 2017. Following the agreement acquiring at least 90% of the shares in Songa Offshore on a fully diluted basis, Transocean intends to make a compulsory acquisition of the remaining shares and to propose at a general shareholders meeting of Songa Offshore that an application be filed with the Oslo Stock Exchange to de-list the Songa Offshore’s shares.

The transaction is subject to customary conditions, including approval of at least 90% of the voting shares of Songa Offshore on a fully diluted basis, necessary regulatory approvals, completion of due diligence of Songa Offshore, and Transocean’s extraordinary general meeting approval.

Last Close Stock Review

At the close of trading session on Wednesday, August 16, 2017, Transocean’s stock price declined 4.17% to end the day at $7.58. A total volume of 25.31 million shares were exchanged during the session, which was above the 3-month average volume of 15.74 million shares. At Wednesday’s closing price, the stock’s net capitalization stands at $2.96 billion.

Pro-Trader Daily:

Pro-Trader Daily (Pro-TD) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. PRO-TD has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles, and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

PRO-TD has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst [for further information on analyst credentials, please email contact@protraderdaily.com. Rohit Tuli, a CFA® charter holder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by PRO-TD. PRO-TD is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

PRO-TD, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. PRO-TD, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, PRO-TD, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither PRO-TD nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://protraderdaily.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: contact@protraderdaily.com

Phone number: (917) 341.4653

Office Address: Mainzer Landstrasse 50 Frankfurt am Main, Germany 60325

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Pro-Trader Daily

ReleaseID: 472883