Regulator-Approved Review Finds Hemen Offer Not Fair to NOL Shareholders

An independent expert opinion has found Hemen Holding Ltd's "mandatory offer" for the shares of Northern Ocean Ltd (NOL) it does not already own "is not fair from a financial point of view to the shareholders of NOL".

Hamilton, Bermuda-domiciled international offshore drilling contractor NOL, which manages its operations from Stavanger, Norway, said in an online statement SB1 Markets AS had been cleared by the Norwegian Financial Supervisory Authority to issue the opinion.

Earlier this year Hemen acquired more shares in NOL, increasing its ownership on a consolidated basis to 70.9 percent of NOL's shares and votes. The figure includes the ownership of Hemen's close associate Grosvenor Holding Ltd. "In addition, Hemen had financial exposure to a further additional 15,000,000 shares, approx. 4.94 percent of the shares in the company, under a swap agreement", investment bank SB1 Markets said in its statement of opinion, as published by NOL.

"Through the acquisition, Hemen surpassed the 50 percent threshold as per Section 6-6 of the Norwegian Securities Trading Act, thereby triggering an obligation to make a mandatory offer for the remaining shares in the company".

That offer gives NOL an equity value of NOK 2.27 billion ($242.76 million), or NOK 7.5 per share. The acceptance period closes September 9.

The offer, SB1 Markets noted, represents "a discount of approximately 2.6 percent compared to the closing price of NOK 7.7 per Northern Ocean share on the Oslo Stock Exchange on 9 July 2026, which was the last trading day prior to the announcement of the contemplated offer, which was made after market close; and a discount of approximately 5.57 percent compared to the volume-weighted average trading price of NOK 7.94 per NOL share on the Oslo Stock Exchange over the last 30 trading days prior to the announcement of the contemplated offer".

"We have assessed the offer price compared to historical takeover premiums since 2020 on the Oslo Stock Exchange", SB1 Markets said. "In addition, we have assessed the company's value using a discounted cash flow model, trading multiples of comparable public companies, net asset value, second-hand transactions, the historical trading of the company's shares and research analysts' recommendations and target prices".

While it concluded the offer was unfair to NOL shareholders, SB1 Markets said, "Shareholders are recommended to study the offer document and to make up their own view on the attractiveness of the offer and the prospects for the company to draw their own conclusions".

NOL chief executive Arne Jacobsen has not accepted the offer and neither have NOL's board members who hold shares in NOL, SB1 Markets noted.

Hemen's press representative has yet to reply to Rigzone's comment request.

NOL's active business consists of the harsh-environment semi-submersible rig Deepsea Mira, delivered 2018 by Hyundai Heavy Industries Co Ltd.

"The company continues to actively market the rig and bid for relevant opportunities. Management sees ample opportunities with potential commencement dates in 2027 and remains encouraged by the demand for harsh environment drilling capacity", NOL said in its report for the second quarter.

NOL reported $65.3 million in short-term assets and $496.86 million in total assets at the end of the second quarter, while short-term liabilities and long-term liabilities stood at $175.77 million and $2.44 million respectively.

Outstanding borrowings as of June totaled $112.8 million, comprising $107.8 million under a term loan and $5 million under a revolving credit facility.

To contact the author, email jov.onsat@rigzone.com