Songa Offshore SE : Agreement to combine with Transocean through a recommended voluntary exchange offer
(Thomson Reuters ONE) -
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.
Exchange ratio, offer price and consideration
As stated above, 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. Under the terms of the Offer, each shareholder of Songa Offshore
will be offered a combination of new shares of Transocean (the "Consideration
Shares") and senior unsecured bonds exchangeable into shares of Transocean
("Consideration CBs"). The Consideration Shares will be valued at USD 8.39 (NOK
66.48) per share, equal to the closing price of the Transocean shares on the
NYSE on 14 August 2017. The value attributed to each Consideration CB will be
the nominal amount of such Consideration CB. The Consideration CB will have a
coupon of 0.50%, five year tenor and be exchangeable at any time by the holder
at a price of USD 10.28 (a 22.5% premium). The Consideration CBs will be listed
on NYSE or NASDAQ.
In addition, each Songa Offshore shareholder may elect to receive a portion of
their consideration in cash up to NOK 125,000 per Songa Offshore shareholder.
Any Songa Offshore shareholder holding Shares valued at less than NOK 125,000
based on the Offer Price may choose to receive 100% of their consideration in
cash. Notwithstanding the foregoing, the aggregate Offer Price paid to each
Songa Offshore shareholder participating in the Offer shall be comprised, as
near as possible, of 50% Consideration Shares and 50% Consideration CBs, with
any exercise by such shareholder of the Cash Election being deducted first from
the aggregate number of Consideration CBs issued to such shareholder and second
to the aggregate number of Consideration Shares issued to such shareholder.
Further terms of the Offer
The complete details of the Offer, including all terms and conditions, will be
included in an offer document expected to be distributed to Songa Offshore
shareholders, following approval by the Oslo Stock Exchange and review by the
Norwegian Financial Supervisory Authority, as well as filing with the U.S.
Securities and Exchange Commission. As will be detailed in the offer document,
completion of the Combination and the Offer will be subject to satisfaction or
waiver of customary conditions, including, without limitation, a minimum
acceptance of at least 90% of the voting shares of Songa Offshore on a fully
diluted basis, regulatory approvals being obtained, no material breach by Songa
Offshore of the Combination agreement and no material adverse change having
occurred in Songa Offshore. The Offer is subject to approval to issue the
Consideration Shares by a shareholders' meeting of Transocean and completion by
Transocean of certain confirmatory due diligence reviews without material
findings. The Offer is not subject to any financing conditions.
Subject to fulfilment of the conditions to the Offer, it is currently expected
that the Combination may tentatively be completed in late 2017 or early 2018.
The Combination agreement has been entered into on customary terms. As part of
the agreement, Songa Offshore has entered into undertakings not to solicit
competing offers from third parties.
Bond loans
In the event the Offer is completed on the terms described above, there will be
a change of control event under each of the Company's bond loans. In connection
with, and conditional upon completion of, the Offer, Transocean will also offer
to the holders of bonds in SONG04 and SONG05 to exchange (i) each SONG04 Bond
for Consideration CBs, cash or a combination thereof in a total amount equal to
103.5% of the principal amount of such SONG04 Bonds and (ii) each SONG05 Bond
for Consideration CBs, cash or a combination thereof in a total amount equal to
101% of the principal amount of such SONG05 Bonds, for both (i) and (ii) plus
accrued unpaid interest on the Bonds up to completion of such bond offer.
Subject to making the Offer, Transocean will also exchange with Perestroika AS
its USD 50 million shareholder loan for Consideration CBs in a total amount
equal to 100% of the principal amount of the loan (plus accrued unpaid
interest).
Pre-acceptances
The largest shareholders of Songa Offshore, Perestroika AS (represented on the
board by Mr. Frederik Mohn (chairman)) and funds managed by Asia Research &
Capital Management Ltd. and York Capital Management Global Advisors, LLC,
beneficially owning 87 million, 45 million and 15 million shares, respectively,
have, subject to the terms and conditions of the pre-acceptances, irrevocably
agreed to tender all shares that they own (and will own through exercise of
convertible bonds and warrants) in the Offer once it has been commenced. Under
the pre-acceptances the pre-accepting shareholders also agreed to receive all
consideration through Consideration Shares and Consideration CBs. The pre-
acceptances do not provide the ability for termination in the event of any
competing offers, but includes a price protection should Transocean increase the
Offer Price. In addition, Transocean has received irrevocable undertakings from
each of the following directors and management members to tender their shares
into the Offer once it has been commenced: Arnaud Bobillier, Mike Mannering,
Johan Mikkelsen, Mark Bessell, Bjørnar Iversen and Jan Rune Steinsland.
In total, the aggregate number of shares subject to these irrevocable
undertakings represent approximately 77% of Songa Offshore's share capital on a
fully diluted basis.
* * * * *
For further details regarding the terms and conditions of the Offer and the
expected timing of the Offer, please see the announcement made by Transocean
today.
Pareto Securities AS acts as financial advisor to Songa Offshore in connection
with the Combination and the Offer. Advokatfirmaet Schjødt AS acts as Songa
Offshore's Norwegian legal advisor and Cleary Gottlieb Steen & Hamilton LLP as
US legal advisor.
For further details, please contact:
Bjørnar Iversen, CEO (+357 99649152)
Jan Rune Steinsland, CFO (+47 97052533)
This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain statements that are "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, as amended. Songa Offshore,
Transocean and Transocean Inc. (("TINC" and, together with Transocean, the
"Offeror")) have identified some of these forward-looking statements with words
like "believe," "may," "could," "would," "might," "possible," "will," "should,"
"expect," "intend," "plan," "anticipate," "estimate", "potential", "outlook" or
"continue," the negative of these words, other terms of similar meaning or the
use of future dates. Forward-looking statements in this communication include
without limitation, statements about the benefits of the proposed offer and
transaction, including future financial and operating results and synergies,
Songa Offshore's, Transocean's and the combined company's plans, objectives,
expectations and intentions, and the expected timing of the completion of the
transaction. Such statements are qualified by the inherent risks and
uncertainties surrounding future expectations generally, and actual results
could differ materially from those currently anticipated due to a number of
risks and uncertainties. Risks and uncertainties that could cause results to
differ from expectations include: uncertainties as to the timing of the
contemplated transaction; uncertainties as to the acceptance of the offer by
Songa Offshore's shareholders and approval of Transocean's shareholders required
in connection with the contemplated transaction; the possibility that a
competing proposal will be made; the possibility that the closing conditions to
the offer and the contemplated transaction may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse to grant a
necessary regulatory approval; the effects of disruption caused by the
announcement of the contemplated transaction making it more difficult to
maintain relationships with employees, customers, vendors and other business
partners; the risk that shareholder litigation in connection with the
contemplated transaction may affect the timing or occurrence of the contemplated
transaction or result in significant costs of defense, indemnification and
liability; other business effects, including the effects of industry, economic
or political conditions outside of the control of the parties to the
contemplated transaction; transaction costs; actual or contingent liabilities;
and other risks and uncertainties discussed in Transocean's filings with the
U.S. Securities and Exchange Commission (the "SEC"), including the "Risk
Factors" section of Transocean's annual report on Form 10-K for the fiscal year
ended December 31, 2016. You can obtain copies of Transocean's filings with the
SEC for free at the SEC's website (www.sec.gov) or Transocean's website at
http://www.deepwater.com. Neither Songa Offshore nor Transocean undertakes any
obligation to update any forward-looking statements as a result of new
information, future developments or otherwise, except as expressly required by
law. All forward-looking statements in this communication are qualified in their
entirety by this cautionary statement.
Additional Information and Where to Find It
In connection with the proposed Combination, Transocean will file with the U.S.
Securities and Exchange Commission (the "SEC") a proxy statement (the "Proxy
Statement") and Transocean and Transocean, Inc. ("TINC"), will file a
Registration Statement on Form S-4 (the "Registration Statement") containing a
prospectus with respect to the Consideration Shares and Consideration CBs to be
issued in the Combination and the related transactions (the "Prospectus"). When
available, Transocean will mail the Proxy Statement to its shareholders in
connection with the vote to approve certain matters in connection with the
Transaction and will distribute the Prospectus to certain Songa Offshore
securityholders in the United States in connection with the Combination and
related exchange offers contemplated by the transaction agreement. Transocean
and TINC are also expected to file an offer document with the Financial
Supervisory Authority of Norway (the "Norwegian FSA").
INVESTORS AND SECURITYHOLDERS ARE URGED TO READ CAREFULLY THE DEFINITIVE PROXY
STATEMENT AND/OR PROSPECTUS REGARDING THE COMBINATION IN ITS/THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) OR ANY
DOCUMENTS WHICH ARE INCORPORATED BY REFERENCE IN THE DEFINITIVE PROXY STATEMENT
OR PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMBINATION. You may obtain, free of charge, copies of the definitive Proxy
Statement, Prospectus and Registration Statement, when available, and other
relevant documents filed by Transocean with the SEC, at the SEC's website at
www.sec.gov. In addition, Transocean's shareholders may obtain free copies of
the Proxy Statement and Prospectus and other relevant documents filed by
Transocean and TINC with the SEC from Transocean's website at
http://www.deepwater.com.
This communication does not constitute an offer to buy or exchange, or the
solicitation of an offer to sell or exchange, any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. This communication is not a substitute for any
prospectus, proxy statement or any other document that Transocean and TINC may
file with the SEC in connection with the Combination. The final terms and
further provisions regarding the public officer will be disclosed in the offer
document after the publication has been approved by the Norwegian FSA and in
documents that will be filed by Transocean and TINC with the SEC. No money,
securities or other consideration is being solicited, and, if sent in response
to the information contained herein, will not be accepted.
No offering of securities shall be made except by means of a prospectus meeting
the requirements of the U.S. Securities Act of 1933, as amended, and any
applicable European and Norwegian regulations. The transaction and distribution
of this document may be restricted by law in certain jurisdictions and persons
into whose possession any document or other information referred to herein com
should inform themselves about and observe any such restrictions. Any failure to
comply with these restrictions may constitute a violation of the securities laws
of any such jurisdiction. No offering of securities will be made directly or
indirectly, in or into any jurisdiction where to do so would be inconsistent
with the laws of such jurisdiction.
Participants in the Solicitation
Each of Transocean, TINC, Songa Offshore 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 from Transocean' shareholders
with respect to the approvals required to complete the Combination and the
solicitation of acceptances for the Offer. More detailed information regarding
the identity of these potential participants, and any direct or indirect
interests they may have in the Combination, by security holdings or otherwise,
will be set forth in the Proxy Statement and Prospectus when they are filed with
the SEC. Information regarding Transocean's directors and executive officers is
set forth in the definitive proxy statement on Schedule 14A filed by Transocean
with the SEC on March 16, 2017 and in the Annual Report on Form 10-K filed by
Transocean with the SEC on March 7, 2017. Additional information regarding the
interests of participants in the solicitation of proxies in respect of the
extraordinary general meeting and the Offer will be included in the Proxy
Statement to be filed with the SEC. These documents are available to
Transocean's shareholders free of charge from the SEC's website at www.sec.gov
and from the investor relations section of Transocean's website at
www.deepwater.com.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Songa Offshore SE via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 15.08.2017 - 08:31 Uhr
Sprache: Deutsch
News-ID 556523
Anzahl Zeichen: 20170
contact information:
Town:
Oslo
Kategorie:
Business News
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"Songa Offshore SE : Agreement to combine with Transocean through a recommended voluntary exchange offer"
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