ENSCO PLC (NYSE:ESV) reported that independent proxy advisory entity Egan-Jones Rating Company has joined Glass Lewis in recommending that company shareholders vote in favor of the pending all-stock deal of Atwood Oceanics, Inc. at the firm’s imminent general meeting of shareholders in this week. The Egan-Jones recommendation validates the strategic and financial rationale of the acquisition and clear long-term value creation prospect for Ensco shareholders.
In making its view, Egan-Jones noted that the firm considers the proposed deal to be a desirable approach in increasing shareholder value. After careful review, they consider that approval of the deal is in the best interests of the firm and its shareholders and its opportunities and advantages outweigh the risks related to the deal.
The merger would improve Ensco’s asset base via the addition of latest drillships, jackups and semisubmersibles, creating a strong combined fleet in the industry and fulfill the deep- and shallow-water drilling requisites of customers around the world.
Egan-Jones noted that the merger would result in future business prospects with a geographically diversified customer base and operating segment, with operations spreading across 6 continents in every key deep- and shallow-water basin across the globe, positioning the combined firm to capitalize on increased consumer demand for offshore drilling rigs. It would lead in a well-capitalized pro forma firm with a strong liquidity position.
Carl Trowell, the CEO and President of Ensco, expressed that they are delighted that Egan-Jones has the same view as that of Glass Lewis in supporting the long-term financial and strategic advantages that Ensco’s deal of Atwood would establish. By bringing Atwood’s high-specification resources, they will improve their profile as a Tier 1 offshore driller while supporting a strong pro forma liquidity role and financial flexibility. Importantly, Glass Lewis and Egan-Jones have both recognized the considerable upside the acquisition results in for Ensco shareholders.