Transocean to take control of three rigs as result of subsidiary buy
Offshore drilling contractor Transocean Ltd. has indirectly acquired two drillships and one semi-sub rig by acquiring its subsidiary Transocean Partners LLC.
Transocean has agreed to acquire all of the outstanding common units of Transocean Partners not already owned by Transocean in a share-for-unit merger transaction.
In the merger, Transocean Partners common unitholders will receive 1.1427 Transocean shares for each Transocean Partners common unit. The Transocean Partners unit price implied by the exchange ratio represents a 15% premium to Transocean Partners’ closing price on July 29, 2016.
Transocean expects to issue approximately 22.7 million shares in the merger. Completion of the transaction is conditioned upon approval by Transocean Partners’ common unitholders and is anticipated to close in the fourth quarter of 2016, the company said.
Following completion of the transaction, Transocean Partners will be 100% owned by Transocean and therefore Transocean will have indirectly acquired the 51% ownership interests in two drillships, the Discoverer Inspiration and the Discoverer Clear Leader, and the semi-sub drilling rig Development Driller III that are currently owned by Transocean Partners.
Additionally, Transocean Partners’ common units will cease to be publicly traded on the NYSE.
“We are excited about this merger, as it provides significant and immediate benefits to Transocean in the form of simplified administration and governance, tangible cost savings and improved liquidity,” said Jeremy Thigpen, President and Chief Executive Officer of Transocean.
“The contemplated all-equity transaction is entirely consistent with Transocean’s current liquidity objectives.”
Kathleen McAllister, Chief Executive Officer and Chief Financial Officer of Transocean Partners, said:
“Transocean Partners common unitholders will benefit from a premium to the current unit price and receive shares in an entity with significant financial flexibility, a demonstrated access to capital and meaningfully improved market liquidity of its shares.”
“Additionally, we expect that common unitholders will also benefit from Transocean’s significantly larger and more diverse fleet and its industry-leading contract backlog.”