Norway: BW Offshore Ltd. to Purchase Remaining Prosafe Production.s Shares


BW Offshore Limited , one of the world’s leading FPSO contractors and a market leader within advanced offshore loading and production systems to the oil and gas industry, announced today its intention to make a voluntary exchange offer for all of the shares of Prosafe Production Public Limited not currently owned by BWO.

The consideration offered will be 1.2 BWO shares and NOK 5.25 in cash per Prosafe Production share. This consideration corresponds to NOK 16.21 per Prosafe Production share, based on the closing share price of BWO on 18 June 2010 of NOK 9.13, and values the total share capital of Prosafe Production at approximately NOK 4.1 billion. This represents a premium of 17.0% to the closing share price of Prosafe Production on 18 June 2010, the last trading day prior to the announcement of the Offer and a premium of 20.1% to the one month volume weighted average share price of Prosafe Production for the period ending on 18 June 2010. The Offer further represents a premium of 39.6% to the one month volume weighted average share price of Prosafe Production for the period ending on 19 March 2010, one trading day prior to Prosafe Production’s announcement of the Letter of Intent for the sale of its turret and swivel business (the “Turret Business”).

Carl Arnet, CEO of BWO, comments “The FPSO sector is in need of larger companies that can meet the increasing requirements from clients and regulators in terms of technical competence, scope and investments per unit. BWO is of the opinion that a combination with Prosafe Production will create an FPSO company with the diversification, presence, financial scale and competence to meet such increased requirements going forward. Through the Offer, Prosafe Production shareholders will have the opportunity to participate in developing an industry leader and we believe the Offer represents a balanced and sound transaction for the shareholder groups of both Prosafe Production and BWO.”

The cash consideration of the Offer will be financed by BWO from available credit facilities. In connection with the Offer, BWO has established a new bridging credit facility of USD 1.1 billion from BW Group Limited on competitive terms, with expiry in November 2011. The new credit facility of USD 1.1 billion and available capacity from the existing credit facility of USD 1.5 billion will be sufficient to finance the entire cash consideration under the Offer and also refinance Prosafe Production’s existing credit facilities, while also preserving capacity for growth for the combined company going forward. BWO will not issue any shares as a consequence of the transaction other than the shares to be issued to Prosafe Production shareholders as consideration under the Offer.

Prior to the Offer, BWO owns directly or indirectly 23.88% of the total number of shares in Prosafe Production, while BW Euroholdings Limited, a wholly owned subsidiary of BW Group (the largest shareholder in BWO), owns 6.01% of the total number of shares in Prosafe Production. BW Euroholdings Limited is a close associate of BW Offshore pursuant to Section 2-5 of the Norwegian Securities Trading Act.

BW Group Limited presently owns 66.95% of the total number of shares in BWO. BW Group Limited will be diluted to approximately 47% – 49% shareholding in the combined company upon an acceptance level for the Offer between 90% – 100%.

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Source: BwOffshore, June 21, 2010: