Seabird to Make Offer fro Global Geo Services

SeaBird Exploration Limited is intending to submit a voluntary offer to purchase all the outstanding shares of Global Geo Services ASA (GGS). The purchase price per GGS share under the Offer will be NOK 5.25, and will be settled in cash.

The offer price corresponds to a market capitalization of GGS of approx. NOK 319 million (based on the number of shares currently outstanding), and represents a premium of 40% and 20%, respectively, compared to the volume weighted average price on Oslo Bors over the last week and last month, and a premium of 38% relative to the closing price on Oslo Bors yesterday, June 15, 2006.

Funding of the purchase of shares under the offer is secured by a senior unsecured bond loan of up to NOK 300 million issued by Seabird, of which NOK 100 million is underwritten. The maturity date for the bond loan will be in July 2009, with an option for Seabird to redeem at 102 in 2008. The coupon rate for the loan is 3 month NIBOR + 4.00%. The covenants are limited to (i) a minimum book equity of both US $50 million and 35% of capital employed, and (ii) a limitation on cash distribution to the shareholders of 50% of the group's net profit.

It is envisaged that a formal offer document will be published on or about June 22, 2006. The offer period is expected to start on or about June 22, 2006 and last until July 6, 2006, subject to extensions.

Completion of the Offer will be subject to inter alia the following conditions:

  • SeaBird reaching an ownership of more than 50% of the shares in GGS;
  • receipt of necessary consents and waivers, including competent authorities and material business partners of GGS; and
  • the absence of a material adverse change to the business, assets, capitalization, financial condition or results of operations of GGS.

SeaBird sees several synergies from a combination of SeaBird and GGS. SeaBird is currently a provider of seismic acquisition vessels and Ocean Bottom Surveys, services GGS currently obtains from the open market, while GGS offers multi-client surveys for global oil companies. The GGS business includes multi- client library data for many attractive areas world wide.

Multi-client companies in today's market are struggling to find vessel capacity. A combination of the two companies will secure long term vessel capacity for the multi-client operations of GGS as well as increase the long term vessel utilization for Seabird's fleet. Furthermore, a combination is expected to increase the revenue streams by providing a broader range of services for the oil companies.

Also, a combination of the two companies will lead to a substantially strengthened financial position for the GGS business, and allow GGS more long term planning for its operations.

Tim Isden, Chairman of SeaBird, states: 'I am really pleased to propose this acquisition, which will bring the SeaBird Group together with GGS. This will create a world wide marketing, acquisition and processing business with an extensive data library, resulting in a fully integrated seismic corporation. The combination of the two companies will expand the areas of operation, increase both internal and external utilization of resources, and build a sound basis for progression in the seismic industry during the years to come. In addition, the combined company will be positioned to take advantage of a healthy balance sheet and fair market terms for expansion funding.'

SeaBird has been advised by the investment bank ABG Sundal Collier and the law firm Schjodt.

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