Seadrill Ltd., held by billionaire John Fredriksen, plans to take over Sevan Drilling ASA and its deepwater oil and gas rigs after acquiring more than half the company’s shares at a price Sevan’s board says is too low.
Seadrill increased its stake to 50.1 percent, buying 116.9 million shares at 3.95 kroner each, and will submit a mandatory offer for outstanding equities, it said today in a statement.
That price “undervalues Sevan Drilling’s assets and prospects, and represents a significant discount to latest analyst consensus net asset value estimates and target prices,” Sevan Drilling said today in a separate statement.
The company rose 17 percent, the biggest gain since Dec 2, 2011, to 3.98 kroner by 11:22 a.m. in Oslo. That’s 50 percent below its initial public offering price in 2011. Hamilton, Bermuda-based Seadrill gained 0.2 percent to 241.1 kroner.
The offer price for Sevan Drilling, which owns two ultra-deepwater drilling units and two more being built, values the rigs at $535 million each, Pareto Securities ASA said today.
Seadrill ordered a rig with “premium ultra deepwater” capabilities at an estimated cost of less than $650 million, the company said in a statement on May 4, 2012. It also agreed to buy a rig from Songa Offshore in November for $590 million.
Seadrill didn’t immediately respond to a telephone call and e-mail sent by Bloomberg News today seeking comment.
The company, already a Sevan Drilling shareholder, said yesterday it aimed to buy a controlling stake to halt financing plans that would destroy shareholder value. “Seadrill will seek to propose an alternative and improved financing,” it said.
Sevan Drilling said June 19 it had agreed terms on a $1.45 billion, five-year bank facility. Together with a $500 million bond sale, it would give the Oslo-based driller enough cash to pay for the completion and mobilization of its two new units, scheduled for delivery in September 2013 and April 2014.
Seadrill, the largest owner of ultra-deepwater drilling rigs after Vernier, Switzerland-based Transocean Ltd., is taking advantage of rising demand from oil companies that are extending searches for reserves into deeper and harder-to-access regions.
Fredriksen controls Seadrill with a 24.5 percent stake.