Proposal Represents 17.4% Increase from Agreed
Exchange Ratio
Ensco plc (NYSE: ESV) announced today that it has made a
proposal to Rowan Companies plc (NYSE: RDC) to increase the
exchange ratio for its all-stock combination with Rowan.
Under the terms of the proposal, Rowan shareholders would
receive 2.600 Ensco shares for each Rowan share, a 17.4% increase
from the exchange ratio of 2.215 contemplated by the transaction
agreement dated October 7, 2018 between the parties. Upon closing,
Ensco and Rowan shareholders would own approximately 57% and 43%,
respectively, of the outstanding shares of the combined company.
All other terms and conditions of the transaction agreement would
remain unchanged. The proposal has been unanimously approved by
Ensco’s board of directors.
Ensco’s Non-Executive Chairman of the board of directors Paul E.
Rowsey III stated, “This enhanced proposal is a reaffirmation of
our belief that this combination will generate significant
long-term shareholder value and result in the creation of a leading
offshore driller with substantial opportunities across water
depths, geographies and market conditions. The combined company
will boast some of the industry’s highest-specification assets,
unparalleled geographic coverage, a diverse customer base and
significant future revenue growth opportunities. Further, $150
million of anticipated annual synergies resulting from the
transaction are expected to create $1 billion of capitalized value
for shareholders of the combined company. We look forward to
quickly executing an amendment to the definitive agreement and to
consummating this transaction and delivering on the significant
opportunities of the combined company.”
In addition to a leading offshore fleet with a vast geographic
presence, the combined company will have the industry’s broadest
customer base, with continued focus on customer satisfaction and
the development of new technology to differentiate services and
lower costs. As a result of significant synergies, the transaction
is expected to be accretive to cash flow per share in 2020. The
combined company would also have a strong financial position with
$3.7 billion of total liquidity, $2.6 billion of contracted revenue
backlog and an enhanced credit profile that enables the combined
company to better compete across market cycles1.
Ensco’s Board and senior management team are committed to the
combination of the two companies, which will benefit shareholders,
customers and employees of both companies. However, this proposal
is final and represents the maximum exchange ratio that Ensco is
prepared to offer.
Advisors
Morgan Stanley & Co. LLC is acting as lead financial advisor
to Ensco. HSBC Securities (USA) Inc. and Citigroup Global Markets
Inc. are also providing financial advice to Ensco. Ensco’s legal
advisors are Gibson, Dunn & Crutcher LLP and Slaughter and
May.
About Ensco
Ensco plc (NYSE: ESV) brings energy to the world as a global
provider of offshore drilling services to the petroleum industry.
For more than 30 years, the company has focused on operating safely
and going beyond customer expectations. Ensco is ranked first in
total customer satisfaction in the latest independent survey by
EnergyPoint Research – the eighth consecutive year that Ensco has
earned this distinction. Operating one of the newest
ultra-deepwater rig fleets and a leading premium jackup fleet,
Ensco has a major presence in the most strategic offshore basins
across six continents. Ensco plc is an English limited company
(England No. 7023598) with its corporate headquarters located at 6
Chesterfield Gardens, London W1J 5BQ. To learn more, visit our
website at www.enscoplc.com.
Forward-Looking Statements
Statements included in this document regarding the proposed
transaction between Ensco and Rowan, including closing conditions
of the proposed transaction, and other statements that are not
historical facts, are forward-looking statements (including within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended, and Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”)). Forward-looking statements
include words or phrases such as “anticipate,’ “believe,”
“contemplate,” “estimate,” “expect,” “intend,” “plan,” “project,”
“could,” “may,” “might,” “should,” “will” and words and phrases of
similar import. These statements involve risks and
uncertainties including, but not limited to, actions by regulatory
authorities, rating agencies or other third parties, actions by the
respective companies’ security holders, costs and difficulties
related to integration of Ensco and Rowan, delays, costs and
difficulties related to the transaction, market conditions, and
Ensco’s financial results and performance following the completion
of the transaction, satisfaction of closing conditions, ability to
repay debt and timing thereof, availability and terms of any
financing and other factors detailed in the risk factors section
and elsewhere in Ensco’s and Rowan’s Annual Report on Form 10-K for
the year ended December 31, 2017 and their respective other filings
with the Securities and Exchange Commission (the “SEC”), which are
available on the SEC’s website at www.sec.gov. Should one
or more of these risks or uncertainties materialize (or the other
consequences of such a development worsen), or should underlying
assumptions prove incorrect, actual outcomes may vary materially
from those forecasted or expected. All information in this
document is as of today. Except as required by law, both Ensco
and Rowan disclaim any intention or obligation to update publicly
or revise such statements, whether as a result of new
information, future events or otherwise.
Important Additional Information Regarding the Transaction
Will Be Filed with the SEC
In connection with the proposed transaction, Ensco and Rowan
have filed a joint proxy statement on Schedule 14A with the SEC.
Ensco and Rowan intend that the proposed transaction will be
implemented by means of a court-sanctioned scheme of arrangement
between Rowan and Rowan’s shareholders under the UK Companies Act
2006, as amended, in which case the issuance of Ensco’s ordinary
shares in the proposed transaction would not be expected to require
registration under the Securities Act, pursuant to an exemption
provided by Section 3(a)(10) under the Securities Act. In the event
that Ensco determines, with Rowan’s consent, to structure the
transaction as an offer or otherwise in a manner that is not exempt
from the registration requirements of the Securities Act, Ensco
will file a registration statement with the SEC containing a
prospectus with respect to Ensco’s ordinary shares that would be
issued in the proposed transaction. INVESTORS AND SECURITY HOLDERS
OF ENSCO AND ROWAN ARE ADVISED TO CAREFULLY READ THE JOINT PROXY
STATEMENT (WHICH INCLUDES AN EXPLANATORY STATEMENT IN RESPECT OF
ANY SCHEME OF ARRANGEMENT OF ROWAN, IN ACCORDANCE WITH THE
REQUIREMENTS OF THE UK COMPANIES ACT 2006) AND ANY REGISTRATION
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE
TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A
definitive joint proxy statement has been and any registration
statement/prospectus, as applicable, will be sent to security
holders of Ensco and Rowan in connection with the Ensco and Rowan
shareholder meetings. Investors and security holders may obtain a
free copy of the joint proxy statement (when available), any
registration statement/prospectus, and other relevant documents
filed by Ensco and Rowan with the SEC from the SEC's website at
www.sec.gov. Security holders and other interested parties will
also be able to obtain, without charge, a copy of the joint proxy
statement, any registration statement/prospectus, and other
relevant documents (when available) by directing a request by mail
or telephone to either Investor Relations, Ensco plc, 5847 San
Felipe, Suite 3300, Houston, Texas 77057, telephone 713-789-1400,
or Investor Relations, Rowan Companies plc, 2800 Post Oak
Boulevard, Suite 5450, Houston, Texas 77056, telephone
713-621-7800. Copies of the documents filed by Ensco with the SEC
will be available free of charge on Ensco’s website at
www.enscoplc.com under the tab “Investors.” Copies of the documents
filed by Rowan with the SEC will be available free of charge on
Rowan’s website at www.rowan.com/investor-relations.
Participants in the Solicitation
Ensco and Rowan and their respective directors, executive
officers and certain other members of management may be deemed to
be participants in the solicitation of proxies from their
respective security holders with respect to the transaction.
Information about these persons is set forth in the joint proxy
statement filed by Ensco and Rowan with the SEC on December 11,
2018, respectively, and subsequent statements of changes in
beneficial ownership on file with the SEC. Security holders and
investors may obtain additional information regarding the interests
of such persons, which may be different than those of the
respective companies' security holders generally, by reading the
joint proxy statement, any registration statement and other
relevant documents regarding the transaction, which will be filed
with the SEC.
No Offer or Solicitation
This document is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transaction or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. Subject to certain exceptions to
be approved by the relevant regulators or certain facts to be
ascertained, the public offer will not be made directly or
indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including without
limitation, facsimile transmission, telephone and the internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
Service of Process
Ensco and Rowan are incorporated under the laws of England and
Wales. In addition, some of their respective officers and directors
reside outside the United States, and some or all of their
respective assets are or may be located in jurisdictions outside
the United States. Therefore, investors may have difficulty
effecting service of process within the United States upon those
persons or recovering against Ensco, Rowan or their respective
officers or directors on judgments of United States courts,
including judgments based upon the civil liability provisions of
the United States federal securities laws. It may not be possible
to sue Ensco, Rowan or their respective officers or directors in a
non-U.S. court for violations of the U.S. securities laws.
1 Liquidity and contracted revenue backlog as of September 30,
2018.
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Investor & Media Contacts
Nick Georgas, 713-430-4607Senior Director – Investor Relations
and Communications
Tim Richardson, 713-430-4490Manager – Investor Relations
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