Item 1.01
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Entry into a Material Definitive Agreement.
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Agreement and Plan of Merger
On March 25, 2021, Noble Corporation (“Noble”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Duke Merger Sub, LLC a wholly owned subsidiary of Noble (“Merger Sub”), and Pacific Drilling Company LLC (“Pacific Drilling”), pursuant to which Noble will acquire Pacific Drilling in an all-stock transaction. The board of directors of Noble and the board of directors of Pacific Drilling have unanimously approved and adopted the Merger Agreement.
The Merger Agreement provides that Merger Sub will merge with and into Pacific Drilling (the “Merger”), with Pacific Drilling continuing as the surviving company and a wholly owned subsidiary of Noble. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each (a) membership interest in Pacific Drilling (the “Membership Interests”) will be converted into the right to receive the number of shares of the common stock of Noble (the “Noble Shares”) equal to the Membership Interest Exchange Ratio (as defined below) and (b) each of Pacific Drilling’s warrants outstanding immediately prior to the Effective Time (the “Pacific Warrants”) will be converted into the right to receive a number of Noble Shares equal to the Warrant Exchange Ratio. For purposes of the Merger Agreement, the “Membership Interest Exchange Ratio” equals (y) 16,600,000, less the Pacific Warrant Consideration Shares (as defined below), divided by (z) 2,500,000 and the “Warrant Exchange Ratio” means (a) the aggregate number of Noble Shares issuable pursuant to Section 5.1(f)(iii) of that certain Warrant Agreement, dated as of December 31, 2020, between Pacific Drilling and American Stock Transfer & Trust Company, LLC, as reasonably determined by the board of directors of Pacific Drilling pursuant to the terms thereof (the “Pacific Warrant Consideration Shares”) divided by (b) 441,176.
The Merger Agreement contains customary representations, warranties and covenants by Noble, Merger Sub and Pacific Drilling. The Merger Agreement also contains customary pre-closing covenants, including the obligation of Noble and Pacific Drilling to conduct their respective businesses in the ordinary course of business and to refrain from taking specified actions without the consent of the other party. Pacific Drilling has also agreed not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any alternative business combinations.
Completion of the Merger is subject to certain customary conditions, including, that no injunction shall have been entered and continue to be in effect that prohibits the consummation of the Merger, the representations and warranties of the parties being true and correct to the standards applicable to such representations and warranties and each of the covenants of the parties having been performed or complied with in all material respects. Subject to the satisfaction or waiver of these conditions, the Merger is expected to close in the second quarter of 2021.
The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated by reference herein.
The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such Merger Agreement. The representations, warranties and covenants in the Merger Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. Noble does not believe that these schedules contain information that is material to an investment decision.
Voting and Support Agreement
Concurrently with the entry into the Merger Agreement, Noble and certain equityholders of Pacific Drilling (each a “Member” and, collectively the “Members”), which collectively represent approximately 66% of the issued and outstanding Membership Interests and 64% of the Pacific Warrants, entered into voting and support agreements (collectively, the “Voting Agreements”) in connection with the Merger Agreement.
Among other things, each Voting Agreement requires that each Member that is party to such Voting Agreement to (a) vote (or cause to be voted) its Membership Interests (i) in favor of the approval and adoption of the Merger, the Merger Agreement and all other transactions contemplated by the Merger Agreement, (ii) among other things, against any merger agreement or merger (other than the Merger Agreement, the Merger and the transactions contemplated thereby), any action or any other takeover proposal relating to Pacific Drilling, (b) be bound by certain other covenants and
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