BW Offshore announces a Voluntary Exchange Offer to acquire all Shares of Prosafe Production not currently owned by BWO
NOT FOR PUBLIC DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN
21 June 2010 - BW Offshore Limited ("BWO" or "BW Offshore"), one of the world's leading FPSO contractors and a market leader within advanced offshore loading and production systems to the oil and gas industry, announced today its intention to make a voluntary exchange offer (the "Offer") for all of the shares of Prosafe Production Public Limited ("Prosafe Production") not currently owned by BWO.
The consideration offered will be 1.2 BWO shares and NOK 5.25 in cash per Prosafe Production share. This consideration corresponds to NOK 16.21 per Prosafe Production share, based on the closing share price of BWO on 18 June 2010 of NOK 9.13, and values the total share capital of Prosafe Production at approximately NOK 4.1 billion. This represents a premium of 17.0% to the closing share price of Prosafe Production on 18 June 2010, the last trading day prior to the announcement of the Offer and a premium of 20.1% to the one month volume weighted average share price of Prosafe Production for the period ending on 18 June 2010. The Offer further represents a premium of 39.6% to the one month volume weighted average share price of Prosafe Production for the period ending on 19 March 2010, one trading day prior to Prosafe Production's announcement of the Letter of Intent for the sale of its turret and swivel business (the "Turret Business").
Carl Arnet, CEO of BWO, comments "The FPSO sector is in need of larger companies that can meet the increasing requirements from clients and regulators in terms of technical competence, scope and investments per unit. BWO is of the opinion that a combination with Prosafe Production will create an FPSO company with the diversification, presence, financial scale and competence to meet such increased requirements going forward. Through the Offer, Prosafe Production shareholders will have the opportunity to participate in developing an industry leader and we believe the Offer represents a balanced and sound transaction for the shareholder groups of both Prosafe Production and BWO."
The cash consideration of the Offer will be financed by BWO from available credit facilities. In connection with the Offer, BWO has established a new bridging credit facility of USD 1.1 billion from BW Group Limited on competitive terms, with expiry in November 2011. The new credit facility of USD 1.1 billion and available capacity from the existing credit facility of USD 1.5 billion will be sufficient to finance the entire cash consideration under the Offer and also refinance Prosafe Production's existing credit facilities, while also preserving capacity for growth for the combined company going forward. BWO will not issue any shares as a consequence of the transaction other than the shares to be issued to Prosafe Production shareholders as consideration under the Offer.
The complete details of the Offer, including all terms and conditions, will be contained in an Offer Document to be sent to Prosafe Production shareholders following review and approval by the Oslo Stock Exchange and the Norwegian Financial Supervisory Authority pursuant to Chapters 6 and 7 of the Norwegian Securities Trading Act. As will be further detailed and specified in the Offer Document, the Offer will inter alia be subject to the following conditions being satisfied or waived by BWO:
(i) The Offer, prior to the expiry of the acceptance period for the Offer, having been accepted by shareholders that, together with the shares already owned by BWO, represent more than 90% of the total number of Prosafe Production shares (on a fully diluted basis); (ii) all necessary governmental and regulatory approvals required in connection with the Offer having been obtained; (iii) no governmental or regulatory authority taking any form of legal action (whether temporary, preliminary or permanent) that restrains or prohibits the consummation of the Offer; (iv) any third party consents or waivers required in connection with the Offer having been obtained; (v) no material adverse change occurring with respect to Prosafe Production or any of its subsidiaries; (vi) Prosafe Production and its subsidiaries operating in the ordinary course of business; and (vii) no issue of shares or equity instruments by Prosafe Production or its subsidiaries and no distributions by Prosafe Production.
As will be further detailed and specified in the Offer Document, the consideration of 1.2 BWO shares and NOK 5.25 in cash per Prosafe Production share is conditional upon the sale by Prosafe Production of its Turret Business on conditions as announced by Prosafe Production in its stock exchange notice of 22 March 2010 being completed no later than two Norwegian business days prior to expiry of the acceptance period for the Offer. If this condition is not met, then the Offer consideration will be reduced to 1.2 BWO shares and NOK 2.0 in cash per Prosafe Production share.
Prior to the Offer, BWO owns directly or indirectly 23.88% of the total number of shares in Prosafe Production, while BW Euroholdings Limited, a wholly owned subsidiary of BW Group (the largest shareholder in BWO), owns 6.01% of the total number of shares in Prosafe Production. BW Euroholdings Limited is a close associate of BW Offshore pursuant to Section 2-5 of the Norwegian Securities Trading Act.
BW Group Limited presently owns 66.95% of the total number of shares in BWO. BW Group Limited will be diluted to approximately 47% - 49% shareholding in the combined company upon an acceptance level for the Offer between 90% - 100%.
It is expected that the Offer Document will be sent to Prosafe Production shareholders during the week starting 12 July 2010. The acceptance period for the Offer will be 20 U.S. business days from the date of the Offer Document being released in order to allow the Offer to be extended to certain Prosafe Production shareholders in the United States of America pursuant to an exemption from registration requirements under the U.S. Securities Act (as defined below). The acceptance period may be extended, at any time and one or several times, provided however that the acceptance period may not exceed 10 weeks.
The Offer will not be made in any jurisdiction in which the making of the Offer would not be in compliance with the laws of such jurisdiction. This notification does not in itself constitute an offer. The Offer will only be made on the basis of the offer document and can only be accepted pursuant to the terms of such document. In the United States, the Offer will only be made and the consideration shares will only be offered to Prosafe Production shareholders who are "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") in transactions not involving any public offering within the meaning of the U.S. Securities Act.
BWO invites analysts, investors and media to a presentation of the Offer on Monday 21 June at 10:00 (CET) at the Carnegie Conference Center, Stranden 1B, Aker Brygge.
The presentation will be webcast live on BWO's web page www.bwoffshore.com
Carnegie ASA and HSBC Bank Plc are acting as financial advisers to BWO in connection with the Offer.
Advokatfirmaet Thommessen AS is BWO's legal advisor as to Norwegian law in connection with the Offer.
For further information, please contact:
Carl K. Arnet, CEO BW Offshore, +65 9630 3290
Knut R. Sæthre, CFO BW Offshore, +47 9111 7876
Kristian Flaten, VP Finance and Investor Relations BW Offshore, +47 9509 2322
About BW Offshore
BW Offshore is one of the world's leading FPSO contractors and a market leader within advanced offshore loading and production systems to the oil and gas industry. BW Offshore has more than 25 years' experience and has successfully delivered 14 FPSO projects and 50 turrets and offshore terminals. BW Offshore's technology division APL has delivered solutions for production vessels, storage vessels and tankers in a wide range of field developments. Adapting through competence, in-house technology, solid project execution and operational excellence, BW Offshore ensures that customer needs are met through versatile solutions for offshore oil and gas projects. BW Offshore has a global network with offices in Europe, Asia Pacific, West Africa and the Americas. BW Offshore has 1,100 employees and is listed on the Oslo Stock Exchange. For more information, please visit www.bwoffshore.com and www.apl.no.
This information is subject to the disclosure requirements according to section 5-12 of the Norwegian Securities Trading Act.
This announcement is not an offer for sale of any securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act. BW Offshore Limited has not registered and does not intend to register any portion of any offering of shares in the United States or to conduct a public offering of any securities in the United States.