McDermott International has rejected Subsea 7’s offer to takeover the company.
Subsea 7 has, on Tuesday (April 17, 2018), made a proposal to acquire the entire issued share capital of McDermott for USD 7.00 per share, payable entirely in cash or up to 50% in Subsea 7 stock and the balance in cash.
The proposal represents a premium of 16% to the latest closing share price of McDermott on April 20, 2018, and a premium of 15% over the volume weighted average share price of McDermott over the previous 20 trading days.
In a letter sent to the McDermott’s board of directors Subsea 7 said that it will consider increasing its proposed price upon further assessment of McDermott’s business through discussions with the company’s management.
On April 20, 2018, the board of directors of McDermott rejected Subsea 7’s proposal.
Jean Cahuzac, Subsea 7’s chief executive officer, said, “Given the attributes of the proposed transaction and our stated ability to further enhance our proposed terms, we encourage the McDermott board of directors to reconsider this compelling opportunity to combine two complementary businesses. Our proposal provides equity upside in a company with a robust financial position, as well as a meaningful premium. We see significant merit in such a transaction for all shareholders, and with our financial and legal advisors continue to be open to discussions.”
Subsea 7 also believes there would be significant benefits to all pro forma shareholders from a combination of the businesses.
The company’s proposed transaction would be a subject to regulatory and other customary closing conditions.