DOF Intends to Acquire Outstanding Shares of DOF Subsea

DOF ASA agreed to a non-binding term sheet with a financial partner in which the intention is that DOF or a newly incorporated private holding company shall put forward an offer to acquire all of the outstanding shares of DOF Subsea ASA at NOK 45.00 per share in cash.

The Offer will represent a 47.5% premium to the closing share price of NOK 30.50 and a 43.2% premium to the volume weighted average share price over the last 3 months. If the offer is successful, DOF and the financial partner, with whom DOF is in exclusive discussions, intend to own DOFSUB on a 50/50 basis through the HoldCo and to enter into several subsequent transactions as described below.

The intention to proceed with the Offer for the outstanding shares in DOFSUB and subsequent transactions is conditional upon, among other things, the satisfactory completion of a due diligence and the execution of final agreements between the parties based on the agreed term sheet. The intention is to launch the Offer as soon as the due diligence is completed and final agreements between the parties are entered into.

It is expected that the Offer will be conditional upon, among other things, a minimum acceptance level giving DOF or HoldCo, together with the shares already owned directly and indirectly by DOF, more than 90% of DOFSUB's shares on a fully diluted basis and that all required governmental approvals are obtained. DOF is currently the majority owner of DOFSUB holding, directly and indirectly, 57.05% of the share capital. If the Offer is successful, the intention is to delist DOFSUB. The financial partner's investment in HoldCo will in effect reduce DOF's indirect ownership in DOFSUB from 57.05% to 50% in exchange for gross proceeds of approximately NOK 380 million in cash.

DOF and the financial partner have also agreed that if the Offer is successful, HoldCo will acquire DOF's ownership of 50.5% in DOF Installer at a price of NOK 135 per share in exchange for new shares in HoldCo. In order to maintain the intended 50/50 ownership in HoldCo, the financial partner will contribute the same aggregate cash amount as equity in Holdco. DOF and the financial partner expects that HoldCo will put forward a cash offer to acquire the remaining shares outstanding in DOF Installer at the same price.

Furthermore, subject to the successful completion of the Offer for DOFSUB, HoldCo will acquire from DOF the rights under the contracts for the three ROV support vessels currently being built in India with expected delivery in 2009 and 2010 for approximately NOK 250 million in cash. As part of this transaction, HoldCo will assume the remaining capital expenditure commitment in relation to the contracts. DOF and the financial partner will each inject a cash amount of approximately NOK 125 million as equity in HoldCo to finance the purchase.

Separately, and subject to the successful completion of the Offer of DOFSUB, the financial partner will subscribe for new shares in Norskan AS, a 100% owned subsidiary of DOF, which will give the financial partner a 25% ownership in Norskan AS post the directed equity offering. The directed equity offering is expected to raise new equity capital of approximately NOK 600 million in Norskan AS. Norskan AS is the holding company of the Norskan Offshore group which will own and operate a total fleet of nine offshore vessels in Brazil.

The financial partner will commit to its pro rata share in relation to its intended ownership in DOFSUB of up to USD 400 million for expansion capital expenditures and acquisition opportunities.

Mons Aase, CEO of DOF, said, "The proposed transactions will provide DOF and DOF Subsea sufficient capital to pursue their growth strategies and enable us to consolidate and strengthening our position in Brazil. As a result of the envisaged growth of our Brazilian operations, we will also consider a potential IPO of our Brazilian business in Brazil. We are of the opinion that the intended offer to acquire the shares in DOF Subsea at NOK 45 per share represents an attractive offer to the DOF Subsea shareholders."


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