Subsea 7 (OSLO: SUBC) has failed in an initial bid to acquire Norwegian subsea services firm DOF Group (OSLO: DOF).
The Luxembourg-registered company revealed on Friday that it had made a proposal to DOF to acquire its entire issued share capital
Under the terms of the offer, lodged yesterday, DOF equity holders were offered NOK 35 a share, comprised of NOK 7 in cash, and NOK 28 in newly-issued Subsea 7 shares.
Subsea 7 has offered holders of DOF equity NOK 35 per share, comprised of NOK 7 in cash and NOK 28 in newly-issued shares in Subsea71.
Should the proposed transaction have gone through, DOF’s ownership of the “pro-forma entity would be 11.5%”.
According to Subsea 7, the “proposal represents a premium of 25% to DOF’s targeted IPO2 price of NOK 28 per share”.
On Friday, the Oslo-listed group was informed that its offer had been rejected at this stage.
The energy services giant says that merging with DOF, whose DOF Subsea branch has a base in Aberdeen, would bring significant benefits to its shareholders.
That includes “accelerated shareholder returns”, with Subsea 7 planning to return $250 million per annum to its investors for five years from 2025.
Moreover it would secure “access to an enlarged fleet”, giving the firm more vessels to “capitalise on positive developments in the subsea and offshore wind markets”.
Subsea7 claims the structure of the combined company would also “have investment-grade characteristics, a significant improvement on the DOF stand-alone capital structure”.
In a statement, the company said: “The offer is conditional upon retention of the existing bank debt and bond debt facilities without impact from any change of control provisions that may exist.
“Subsea7’s offer would be subject customary regulatory approvals and other conditions as described in the Offer letter.”
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