Paragon Offshore plc (NYSE: PGN) has acquired 52,749,014 shares of Prospector Offshore Drilling SA (OSE: PROS). Paragon acquired the shares at a price of 14.50 Norwegian kroner (NOK) per share, or $2.13 per share based on the exchange rate of one US dollar to 6.80 NOK. Following this transaction, Paragon owns a total of 52,749,014 shares of Prospector, equal to 55.8% of the outstanding shares of Prospector.
Paragon intends to launch a mandatory tender offer for the remaining outstanding shares of Prospector within four weeks as mandated by applicable Luxembourg and Norwegian law. In addition, Paragon will request the board of directors of Prospector to convene a general meeting of the Prospector shareholders to elect three new Paragon designated directors to the Prospector board.
Prospector owns and operates two high-specification Friede and Goldman JU-2000E jackups contracted to Total SA for use in the UK sector of the North Sea. The first unit, Prospector 1, is contracted until September 2016 at a dayrate of $185,000 and the second unit, Prospector 5, is contracted for three years following contract commencement at a dayrate of $218,000. Combined, the contracts have backlog of $384 million. Both contracts contain customer options for an additional term (three years and two years, respectively) at the same dayrates.
Prospector has three additional JU-2000E jackups under construction at the Shanghai Waigaoqiao Shipbuilding yard in China, the same yard that delivered Prospector 5. These three units, Prospector 6, Prospector 7, and Prospector 8, have delivery dates of December 2014, September 2015, and March 2016. Prospector has the option to delay the delivery of Prospector 6 by up to four months.
Paragon's advisors on the transaction are Swedbank.