Ensco (ESV) today announced that its wholly-owned subsidiary, Ensco (Bermuda) Limited, is making a partial tender offer to purchase in the market 19% of the outstanding shares in Scorpion Offshore Ltd. (OSE: SCORE) at a price in cash of NOK 39.50 per share.
The partial tender offer commences immediately and will expire on 28 May 2010 at 6:30 p.m. Oslo time. The shareholders first tendering their shares will have priority with respect to allocation of sales (first come-first served).
Following the successful closing of the partial tender offer, Ensco or one of its subsidiaries will take such additional steps permitted or required by law to acquire the remaining shares of Scorpion Offshore at the same cash price, subject to customary conditions. If the partial tender offer is not successful, Ensco does not intend to take further steps to acquire Scorpion Offshore under the proposal. Ensco (Bermuda) Limited is not obligated to purchase in the partial tender offer less than the number of shares that, when aggregated with shares subject to certain irrevocable preacceptances and conditional sales agreements, would equal more than 50% of the outstanding shares.
The Scorpion Offshore Board of Directors has decided to recommend Ensco’s proposal including the partial tender offer. Shareholders, including members of Scorpion Offshore’s senior management and the Board of Directors and their affiliates (including Kistefos and Polgas), representing in the aggregate 31.2% of the outstanding shares have undertaken to accept any subsequent voluntary or mandatory offer, if made by Ensco, and have granted Ensco an option to purchase their shares at the same cash price of NOK 39.50 per share.
If the partial tender offer is successful and Ensco chooses to exercise the options granted by members of Scorpion Offshore’s senior management and Board of Directors and their affiliates, then it will proceed to take such additional steps permitted or required by law to acquire the remaining shares of Scorpion Offshore at the same price per share of NOK 39.50.
Ensco reserves the right, at its sole discretion, to withdraw the partial tender offer at any time or to extend the offer period. Any such withdrawal or extension of the partial tender offer will be publicly announced no later than 28 May 2010 at 6.30 p.m. Oslo time.
Scorpion Offshore shareholders who want to accept the Offer need to contact Matthew Cyzer (telephone +44 20 7774 8333) or Matthew Stanton (telephone +44 20 7552 9865) at Goldman Sachs International or Gaute Ulltveit-Moe at Arctic Securities (telephone +47 21 01 32 00) by 6.30 p.m. Oslo time on 28 May 2010.
Any steps to acquire shares not yet owned by Ensco after the partial tender offer would be contingent upon successful completion of the partial tender offer, receipt of all necessary legal and regulatory approvals and satisfaction of other customary terms and conditions specified in the accepted proposal, which contains customary termination and termination fee provisions.
Chairman, President and CEO Dan Rabun stated, "Scorpion Offshore is a highly-respected offshore drilling contractor with an excellent reputation for safety and operational excellence. The proposed transaction fits our strategy of high-grading our fleet with newer rigs that will benefit from stronger utilization and higher day rates.”
Scorpion Offshore’s rig fleet is comprised of seven recently built LeTourneau Super 116 jackup rigs that can drill in up to 350’ of water to a total depth of 30,000’. All seven rigs were delivered from the shipyard within the past few years. As noted in Scorpion Offshore’s most recent Fleet Contract Status Report, the seven rigs have contracts up to three years in duration, and the average day rate is approximately US$167,000, which amounts to a sizeable contract backlog.