On April 28, 2008, Seadrill announced that it had acquired 8.1 million shares of Scorpion bringing its total shareholding to 19,494,700, an ownership position of 36%. In accordance with Norwegian Securities law, Seadrill must offer to acquire all issued and outstanding shares of Scorpion.
The Mandatory Offer is that required offer and it offers NOK 80 per Scorpion share, in cash. Detailed information about the Mandatory Offer, including the conditions of the Mandatory Offer, is included in the Mandatory Offer document dated May 26, 2008.
The Board believes that the combination of Scorpion's high specification jackups and other growth opportunities with the modern Seadrill fleet could create significant synergies but those synergies would benefit only Seadrill, not Scorpion shareholders, if the Mandatory Offer is successful. In addition, the Board does not believe that the Mandatory Offer reflects the true value of Scorpion for the following reasons:
Taking all of these factors into consideration, the Board believes that an offer of NOK 80 per share for the remaining shares in Scorpion is inadequate and does not represent the best opportunity for a premium over the market price for Scorpion shares. In light of the foregoing, the Board (by unanimous vote of all directors) recommends that Scorpion shareholders not accept or tender their shares in the Mandatory Offer.
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