Kristian Siem’s Subsea 7 has dropped its pursuit of restructured Norwegian offshore vessel owner DOF just days after launching a takeover bid.
The Oslo-listed company made a proposal on Friday to acquire the entire issued share capital of DOF at NOK35 ($3.3) per share, comprising NOK7 in cash and NOK28 worth of new shares, offering DOF shareholders an 11.5% stake in the company.
Subsea7 said it believed the combination with DOF would bring significant benefits to shareholders at both companies, including $250m per year returned to owners over five years from 2025. The move would also give Subsea 7 access to an enlarged fleet to further capitalise on positive developments in the subsea and offshore wind markets.
Although the offer represented a premium of 25% to DOF’s targeted IPO price of NOK28 per share, in which billionaire tycoon John Fredriksen plans to inject about NOK250m, DOF’s board rejected it the same day.
The restructured group with over 50 offshore vessels in its fleet said the offer from Siem was far below the value most shareholders have expressed willingness to sell at in the pre-sounding of the IPO. DOF’s board also cited significant uncertainties as to whether a transaction would be successfully completed or not based on the expressed interest and the fact the IPO would have to be cancelled.
Responding to DOF’s comments, Subsea 7 on Monday said it is not prepared to amend its offer without DOF’s board expressing willingness to open a constructive dialogue.
“Subsea 7 reiterates its conviction in the strategic rationale, industrial logic and the attractiveness of Subsea 7 equity as part of the offer, which it believes is in the best interests of both companies’ shareholders,” the company said in Oslo filing.
