Standard Drilling directors reject Saga Tankers offer

July 9, 2015

Saga Tankers’ potential acquisition of the Oslo-listed Standard Drilling has hit a stalemate.

Namely, in a statement issued today, the board of directors of the target company said the takeover offer of NOK 1.35 per share, launched in June, is not good enough.

The offer values Standard Drilling at a market capitalization of NOK 353,700,000 ($45.77 million).

Responding to the offer, the Standard Drilling directors said: “The Offer Price of NOK 1.35 is considered to be below Standard Drilling’s own current net asset value and is believed to undervalue the company’s prospects. As of end of March SDSD had approximately $54.6 million in cash.”

“Based on an overall assessment, it is the Board’s view that the offer price is at the low-end of what it considers to be a fair market value of the Company and the Board has concluded to recommend to the Company’s shareholders not to accept the offer of SAGA.”

Standard Drilling was established for the purpose of building a premium oilfield services company with superior assets, systems and people. Having sold all initial jack-up rig building contracts, the strategy of SDSD has changed, from building up to become an operator of rigs, to being an investment company within the oil and gas service sector. In a statement today, the board of directors said the company’s assets consisted only of cash.

Background

On May 20, 2015, Saga Tankers announced that it had purchased 78,338,000 shares in Standard Drilling at a price of NOK 1.35 per share, corresponding to a total purchase price of NOK 105,756,300. The shares were purchased from Clearwater Capital Partners Fund.

After the announcement of the acquisition, the company purchased an additional 15,674,569 shares in SDSD at a price of NOK 1.35 per share. The additional shares were bought for a total purchase price of NOK 21,160,668.15.

These acquisitions then triggered the mandatory takeover offer for the rest of the shares, announced June 17. The period in which the offer may be accepted,
began on the 17th of June, 2015 and ends on the 15th of July, 2015 at 17.30 CET.

Offshore Energy Today Staff