China Oilfield to acquire Awilco for $2.5 billion
07 Jul 2008
China Oilfield Services Limited (COSL) said that it would acqire Awilco Offshore ASA's 100 per cent shares fpr NOK 85 will in a $2.5-billion deal. The Offer represents a premium of 18.7 per cent over the closing price of AWO shares on 4 July 2008 and a premium of 42.4 per cent over the closing price on 29 May 2008, the last day prior to AWO confirming a third party had expressed an interest in acquiring the company.
COSL's activities are conducted in over 15 countries and regions, including North and South America, the Middle East, offshore Africa and offshore Europe. It currently operates 15 drilling rigs, including 11 jack-ups and 3 semi-submersibles while operating one leased jack-up rig.
In addition, COSL owns and operates the largest and most diverse fleets in offshore China, including 75 support vessels and four oil tankers, five chemical tankers, eight seismic vessels, and four geotech survey vessels. It also has a vast array of modern facilities and equipment for wire-line logging, drilling fluids, directional drilling, cementing, well completion, acidulation, and well work-over services.
AWO is an international offshore drilling contractor owning and operating five jack-up drilling rigs and two accommodation units. Another three jack-up drilling rigs and three semi submersible drilling rigs are under construction. AWO also holds options for the construction of two semi submersible drilling rigs.
AWO's board of directors has unanimously decided to recommend the Offer. In addition, Awilco AS and Aweco Holding AS, representing in aggregate 40.11 per cent of the outstanding shares in AWO, have undertaken to accept the offer for their own shareholdings in AWO.
The Offer will be made by COSL Norwegian AS, a Norwegian limited liability company 100 per cent subsidiary by COSL and will be financed by way of internal resources of COSL and committed external financing from banks.
The combination of COSL and AWO would create the world's 8th largest rig fleet, consisting of 34 operated rigs (including rigs under construction) with operation and growth opportunities in most major international markets. AWO's modern high-specification rigs and cutting-edge technology for offshore drilling is a good strategic fit for COSL pursuant to its globalization and growth strategies.
Lehman Brothers Asia Limited and J.P. Morgan Securities (Asia Pacific) Limited are acting as international financial advisors for COSL and the Offeror, and China International Capital Corporation (Hong Kong) Limited is acting as financial advisor for COSL and the Offeror. AWO is being advised by Fearnley Fonds ASA and Pareto Securities AS in connection with the Offer.
