Transocean Ltd. (RIG) said it has reached an agreement with Songa Offshore SE whereby it will make a Voluntary Exchange Offer to acquire 100 percent of the issued and outstanding shares of Songa Offshore, including shares issued before expiry of the offer period as a result of the exercise of warrants, convertible loans and other subscription rights.
The consideration in the Offer will be based upon NOK 47.50 per share of Songa Offshore, representing a 37.0% 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 approximately NOK 9.1 billion or US$1.2 billion, and an enterprise value of approximately NOK 26.4 billion or US$3.4 billion.
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 approximately US$40 million.
The transaction is recommended by Songa Offshore's board of directors and certain members of the senior management team.
As per the deal, Songa Offshore shareholders will receive consideration comprised of 50% Transocean Ltd. newly issued shares and 50% in convertible bonds exchangeable into new shares in Transocean Ltd.
The exchange ratio is equal to 0.7145 times, based on the Transocean Reference Price of US$8.39 per share and a USD/NOK exchange ratio of 7.9239 as per close August 14, 2017.
Each Songa Offshore shareholder may elect to tender up to 2,631 Songa Offshore 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 shareholder.
Upon Transocean acquiring at least 90% of the shares in Songa Offshore on a fully diluted basis through the Offer, it 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 shares.
Transocean expects to close the transactions contemplated by the Offer during the fourth quarter of 2017.
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