OSLO (Reuters) ? World No.1 oil drilling contractor Transocean (RIGN.VX) is to pay $1.43 billion for Aker Drilling (AKD.OL), almost double its market price, to boost its presence in Norway and at the high-tech end of the industry.
The 26.50 Norwegian crowns per share bid, at a 98.5 percent premium to Aker Drilling's closing price on Friday and 62 percent above its 30-day average price, is backed by shareholders representing 60.5 percent of its stock and beat off interest from other parties, Norway-based Aker said.
Transocean was owner and operator of the Deepwater Horizon rig used to drill the well that caused last year's U.S. Gulf oil spill disaster. The company suffered a loss of contract backlog in the second quarter and a fall in profits as costs rose more quickly that the deepwater drilling industry recovered from the drilling ban that followed the catastrophe. The deal adds $1 billion of contract backlog to its books.
"Aker Drilling is an excellent strategic fit for Transocean. said Steven Newman, President and Chief Executive Officer.
"Aker Drilling's high-quality people and state- of-the-art offshore drilling fleet will ensure that we continue to deliver outstanding service to our customers.
The deal, backed by Aker's board, will be immediately earnings enhancing, the company said.
Aker Drilling, spun off from Aker Solutions (AKSO.OL) earlier this year, operates two harsh environment, ultra-deepwater semi-submersible rigs and is expected to take delivery in 2013 of two drillships under construction.
Shares in Aker Drilling rose to 26.1 crowns in early trade on Monday, slightly below Tranocean's bid level. The share had until Friday fallen 38 percent from its peak at 21.40 crowns on March 1, a few days after its initial listing.
Aker Drilling's main owner Aker Capital A/S, a subsidiary of Aker ASA (AKER.OL), on Sunday agreed to sell its 41 percent stake in the company, and Transocean has also received irrevocable pre-commitments of 19.5 percent of the outstanding shares from other shareholders, including funds managed by TPG-Axon Capital.
Oeyvind Eriksen, chief executive of Aker ASA (AKER.OL), said in a statement the transaction "will be completed on competitive terms."
"It will further strengthen Aker's financial clout, and provide additional flexibility in our goal-oriented drive to further develop Aker's investment portfolios," Eriksen said.
Aker ASA spokesman Atle Kigen told Reuters "several parties" had shown interest in its stake in Aker Drilling.
"But Transocean were quick on their feet this weekend and gave an acceptable cash offer," he said. "We negotiated exclusively with Transocean over the weekend."
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.
Aker Drilling has retained Goldman Sachs as financial advisor while BA-HR acted as its legal advisor in connection with the offer.
(Editing by David Holmes and Andrew Callus)
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