PGS Rejects $600MM TGS Offer

PGS ASA’s board has unanimously concluded to reject TGS-NOPEC Geophysical Company ASA’s conditional offer for the purchase of the multi-client data library of PGS ASA, which included a cash consideration of $600 million.

PGS noted that its board and management had reviewed and assessed the unsolicited, conditional and non-binding proposal.

“The board of PGS is of the view that the value of the company’s multi-client data library is significantly greater to PGS than that represented by the TGS proposal, and that the timing of the proposal is opportunistic given the current market backdrop and macro-economic environment,” PGS said in a company statement posted on its website.

“Having consulted with its financial and legal advisers, the board of PGS has concluded that the proposal is not in the best interests of the company and its stakeholders,” PGS added in the statement.

PGS went on to say that it remains committed to its integrated service strategy and the benefits to the company and its stakeholders from the combination of multi-client and contract operations. The company also said it remains focused on its ongoing discussions with its lenders.

In a statement posted on its website last week, TGS noted that the proposed transaction presents an opportunity for PGS and its stakeholders to monetize its multi-client data library “in excess of its full reported value”. TGS added that the offer will secure the liquidity required to repay PGS’ $135 million revolving credit facility due in September and said it will further significantly deleverage the company to support its continued operations and enhance the ability to service the remaining debt.

PGS describes itself as a leading, international, marine geophysical company. The company’s data library comprises more than 328,000 square miles of 3D data, according to its website. TGS describes itself as the world’s largest provider of subsurface data.

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