ENSCO PLC (NYSE:ESV) issued letter to shareholders stating that shareholders have a vital decision to make pertaining the future of the firm at general meeting of shareholders on October 5, 2017. Shareholders are being asked to vote on company’s pending deal of Atwood Oceanics, Inc., which will further improve their competitive position and enhance long-term value for shareholders.
Following a thorough market assessment and negotiation, and grounded on comparable deals, as well as the firm’s anticipations that this deal will generate total synergies and double-digit accretion that create over $585 million of present value at a discount rate of 10%, the Ensco Board unanimously decided that the pending deal of Atwood is in the best stakes of Ensco and its shareholders.
The deal will create a financially stronger international offshore drilling pioneer with distinct fleet capabilities, a diverse customer base and an international footprint spanning six continents with businesses in almost every major shallow- and deep-water basin.
Ensco reported that as shareholders may be aware, Glass Lewis has recommended that company shareholders vote in support of the deal. In making its recommendation, the advisory firm recognized the numerous strategic and financial merits of the acquisition, and the best timing of the deal, noting they find that the proposed deal seems strategically reasonable and financially acceptable from the viewpoint of company and its shareholders.
They recognize that the offshore drilling segment would likely gain from consolidation and that, in this respect, Ensco has taken a proactive measure to assessing a range of opportunities, including the prospective acquisition of assets and lucrative transactions.
Strategically, the proposed deal would result in a larger offshore drilling firm with a broader portfolio of assets. Ensco and Atwood currently have limited client overlap and the combined firm would have a broader and more diversified client base and a diversified geographic profile.