Notable Mergers and Acquisitions of the Day 09/10: (PXP)/(BP)/(RDS-A) (RIG) (KSW)
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- Plains Exploration & Production Company (NYSE: PXP) has entered into a definitive agreement to acquire from BP Exploration & Production Inc. and BP America Production Company (NYSE: BP) all of their interests in certain deepwater Gulf of Mexico oil and gas properties for $5.55 billion. The properties include the BP-Operated Marlin, Dorado and King Fields (collectively the Marlin Hub, 100% working interest), BP-Operated Horn Mountain Field (working interest 100%), BP-Operated Holstein Field (working interest 50%), BP non-operated Diana-Hoover Field (33.33% working interest, operated by ExxonMobil) and BP non-operated Ram Powell Field (31% working interest, operated by Shell Offshore Inc.).
At the end of July 2012, these properties were producing an estimated 59,500 barrels of oil equivalent net per day of which nearly 84% is oil and natural gas liquids with an average American Petroleum Institute gravity of 34 degrees. Significant upside production potential exists in the currently producing reservoirs through numerous low risk, high-margin drilling/recompletion and well workover opportunities. The transaction is subject to preferential rights, title and environmental due diligence and other customary closing conditions. This transaction is effective October 1, 2012 and is expected to close by year-end 2012.
- On September 9, 2012, a subsidiary of Transocean Ltd. (NYSE: RIG) entered into definitive agreements with Shelf Drilling International Holdings, Ltd. to sell, in a series of related transactions, 37 Standard Jackups, including GSF Baltic, and one swamp barge. Of the 38 drilling units, 31 are operating, five are stacked and two are being reactivated.
The aggregate sales price is approximately $1.05 billion, including seller financing of $195 million, and is subject to certain working capital and other adjustments. The seller financing consists of perpetual preference shares in the parent company of Shelf Drilling International that will be entitled to dividends that are cumulative and payable in kind at 10% per annum, generally subject to adjustments escalating up to 14% over time, and are subject to mandatory redemption upon certain specified events, including an initial public offering or change of control of Shelf Drilling International. The agreements relating to the transactions contemplate termination fee payments by both parties in the event that, under specified circumstances, the transactions are not consummated. The transactions are expected to close in the fourth quarter of 2012, subject to certain conditions. The parent company of Shelf Drilling International is a newly formed company sponsored equally by Castle Harlan, Inc., Lime Rock Partners and CHAMP Private Equity and Shelf Drilling International is a newly formed company that will own these drilling units.
- Plains Exploration & Production Company (NYSE: PXP) has entered into a definitive agreement to acquire from Shell Offshore Inc. (NYSE: RDS-A) its 50% working interest in the Holstein Field for $560 million.
At the end of July 2012, these properties were producing an estimated 7,400 barrels of oil equivalent net per day of which nearly 86% is oil and natural gas liquids with an average American Petroleum Institute gravity of 33 degrees. Upside production potential exists in the currently producing reservoirs through numerous low risk, high-margin drilling/recompletion and well workover opportunities. The transaction is subject to preferential rights, title and environmental due diligence and other customary closing conditions. This transaction is effective October 1, 2012 and is expected to close by year-end 2012.
Initial acquisition financing is being fully underwritten by a consortium of banks led by J.P. Morgan Securities LLC. The bank group consists of J.P. Morgan Chase Bank, N.A., Bank of America, N.A., BMO Capital Markets, Barclays Bank PLC, Citigroup Global Markets Inc., Royal Bank of Canada, The Bank of Nova Scotia, TD Securities, and Wells Fargo Bank, N.A. J.P. Morgan Securities LLC and Barclays Capital Inc. advised PXP on this transaction.
- KSW, Inc. (Nasdaq: KSW) has entered into a definitive merger agreement.
Under the terms of the agreement, a subsidiary of Related Companies ("Merger Sub") will acquire all of the outstanding shares of common stock of KSW for $5.00 per share in cash through a cash tender offer followed by a merger. The transaction is valued in the aggregate at approximately $32.1 million. The cash consideration represents a premium of approximately 23% to KSW's closing share price on September 7, 2012, the last trading day before KSW publicly announced the merger. The agreement has been unanimously approved by KSW's Board of Directors.
Under the terms of the merger agreement, the parties anticipate that Merger Sub will commence a tender offer for all of the outstanding shares of KSW before September 21, 2012. If the first step tender offer is successfully completed, Merger Sub will acquire any of the KSW shares of common stock not tendered in the tender offer through a second step merger transaction in which the remaining KSW shares are converted into a right to receive the same consideration per share as paid in the tender offer. The tender offer transaction, which is subject to customary closing conditions, is expected to close by October 26, 2012.
Completion of the tender offer is subject to, among other things, the satisfaction of the minimum tender condition of at least a majority of KSW's outstanding shares of common stock on a fully diluted basis, and other customary closing conditions. The transaction is not subject to a financing condition.
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Related EntitiesJPMorgan, Citi, Bank of America, BMO Capital, Barclays, Dividend, Notable Mergers and Acquisitions, Wells Fargo
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