The battle for control of offshore drilling firm Sevan has stepped up a gear after the company’s board urged shareholders to reject a bid from John Fredriksen’s Seadrill group.
The drilling giant announced its intention to buy up remaining shares in its rival last month after buying a 50.1% stake in Sevan in June.
However, chief executive Scott Kerr and chief financial officer Jon Willman, along with other shareholding board members, said they would not accept the current offer from Seadrill for their shares.
In a statement, deputy chairman Kristian Johansen and director Benedicte Schilbred Fasmer said they did not believe the current offer, of 3.95 Norwegian Krone per share, does not offer fair value for the company.
“The offer price is believed to undervalue Sevan Drilling’s assets and prospects, and represents a significant discount to analyst consensus (before and after announcement of the offer and subsequent releases), net asset value estimates and target prices,” they said.
“In our opinion, the offer price is significantly below the fair market value of Sevan Drilling.
“Furthermore, it is further assumed that Seadrill’s increased vested interest in the company and potential operational and marketing synergies going forward, together with the new, Seadrill supported financing being put in place and the delivery of Sevan Louisiana and Sevan Driller 4, may imply that the company’s shares may represent an attractive financial opportunity for Sevan Drilling’s shareholders.”
But Kerr and Fasmer admitted that, as Seadrill had already secured a controlling stake in Sevan, there could be no guarantee what price the shares would trade going forward.
Seadrill launched their takeover bid in June after Sevan agreed terms on a $1.45billion bank facility and a bond issue which would enable it to complete and launch two new ultra-deepwater drilling units.
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