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Offshore driller Ensco to buy Atwood Oceanics in $839 million deal
May 30, 2017 / 12:40 PM / 4 months ago

Offshore driller Ensco to buy Atwood Oceanics in $839 million deal

(Reuters) - Offshore driller Ensco Plc said it would buy smaller rival Atwood Oceanics Inc in an all-stock deal valued at about $839 million to add high-specification offshore rigs to its fleet.

Atwood shareholders will receive 1.6 Ensco shares for each Atwood share.

The deal, which values each Atwood share at $10.72, represents a premium of 32.6 percent to the company’s Friday close.

Atwood’s shares surged 27.4 percent to $10.24 in premarket trading on Tuesday, while Ensco was down 6.3 percent at $6.29.

Oil and gas producers, recovering from a 55 percent fall in global crude prices since mid-2014, are focusing their efforts on more lucrative shale drilling, while scaling back spending on expensive offshore projects.

This dip in offshore drilling activity has weighed on rates for offshore rigs, eroding cash flows at companies such as Atwood and Ensco that lease out these rigs.

Morgan Stanley & Co LLC, DNB Markets and HSBC Securities (USA) Inc were Ensco’s financial advisers. The company’s legal adviser was Latham Watkins LLP.

Goldman Sachs & Co LLC was Atwood’s financial adviser and Gibson, Dunn & Crutcher LLP was its legal adviser.

Reporting by Yashaswini Swamynathan and Ahmed Farhatha in Bengaluru; Editing by Maju Samuel

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