This statement is made by the Board of Directors of Scorpion Offshore Ltd. pursuant to Rule 14e-2 of the U.S. Securities Exchange Act in connection with the voluntary offer by Fortune Private Equity LLC ('FPE') to acquire all outstanding shares in Scorpion that commenced on April 14, 2008 (the 'Voluntary Offer'). This statement has been approved by all of the directors of Scorpion.On February 14, 2008 FPE announced its intention to launch a voluntary offer (the 'Announcement') pursuant to which FPE, subject to acceptance by at least 90% of the shareholders of Scorpion, will offer to acquire all issued and outstanding shares of Scorpion in exchange for cash. The Voluntary Offer is that intended offer. Detailed information about the Voluntary Offer, including the conditions of the Voluntary Offer, is included in the Voluntary Offer document dated April 14, 2008 (the 'Offer Document').
In preparing this statement, Scorpion's Board of Directors has received and relied upon FPE's notice to the Oslo Stock Exchange ('OSE') as well as the Offer Document first published and sent to all shareholders on April 14, 2008. Scorpion's Board has also relied upon the advice of its financial advisors, Fearnley Fonds ASA and Simmons & Company International. Scorpion's Board of Directors retained Simmons and Fearnley as financial advisors to assist Scorpion in evaluating strategic alternatives to maximize shareholder value, which was the subject of a press release dated September 3, 2007. In that connection, Fearnley and Simmons contacted a group strategic and financial buyers and the process resulted in the offer proposed by FPE. Fearnley and Simmons also advised the Board on appropriate comparable values and the Board relied on the combined advice of Fearnley and Simmons in determining that it is prepared to support the Voluntary Offer by FPE described in the Announcement.
In the Voluntary Offer, the Scorpion shareholders are offered to NOK 80 in cash for each Scorpion share. This offer price values the aggregate of Scorpion's outstanding shares at approximately NOK 4.3 billion. The Board notes that the offer price reflects a premium of 37% to the closing price of NOK 58.50 for the Scorpion shares on February 14, 2008, the last trading day prior to the Announcement. The offer price also represents a premium of 25% and 14% to the volume weighted average prices of NOK 64.21 and NOK 70.01 during the last 3 and 6 months prior to the Announcement, respectively.Based on the Offer Document the Board does not expect any changes to the operation, employees, financial situation or localization as a consequence of the completion of the Voluntary Offer. Scorpion's Board of Directors views FPE's intentions to retain the Scorpion management team and to continue executing the strategy of growing the company to 20 - 25 rigs as positive for all the employees. This accelerated growth strategy will require the dedication and commitment of the entire Scorpion team. Scorpion has an experienced management team that has delivered its first two rigs on-time and on-budget and begun operations of these rigs with minimal downtime and safety incidents. In addition, Scorpion's 2008 and 2009 rig deliveries are positioned to meet the internal needs of the FPE group and continue servicing its third party customer base. Consequently the Board views the acquisition as an attractive strategic prospect for Scorpion.
Scorpion's corporate offices will remain in Houston causing minimal disruption to any of the existing employees. The employees of Scorpion are positive to FPE as a new owner of Scorpion.
None of the members of the Board of Directors or executive management of Scorpion or close associates of such individuals has any current or recent affiliation with FPE and has no particular personal interest in the Voluntary Offer other than the acceleration of vesting of restricted stock held by Scorpion directors and management and as described in the Offer Document.
Based on a thorough evaluation of all appropriate factors, including advice from Fearnley and Simmons on comparable values and independent market information, the Board of Directors of Scorpion has determined unanimously that the Voluntary Offer, on the whole, is a fair and appropriate offer to the Scorpion shareholders, represents the best opportunity for a premium over the market price for Scorpion shares immediately prior to the Announcement and recommends that the shareholders of Scorpion accept the Voluntary Offer. The Board's recommendation is effective as of this date and is subject to modification or change in the event of a material change in market conditions or events directly affecting Scorpion. A Board statement under the Norwegian Securities Trading Act sections 6-16 and 6-19 will be published on or before the May 2, 2008 deadline, which will include determinations by the members of the Board and senior management to tender their shares or not.
Most Popular Articles