Eastern Echo rejects Schlumberger offerNews // November 7, 2007
Eastern Echo Holding Plc has announced that it has rejected a bid by Schlumberger to acquire the new seismic company, which, as highlighted recently in Offshore Shipping Online, has a number of X-BOW seismic ships on order.
In a statement about the unsolicited offer from Schlumberger to acquire all outstanding shares, convertibles and warrants in Eastern Echo Holding Plc, Eastern Echo said:
"The stated offer price is set at a minimum of NKr 11 and a maximum of NKr 12 per share with the final price dependent on the acceptance level achieved under the offer. The offer is structured with a minimum price per share of NKr 11 given a minimum acceptance level of 67 per cent, plus an additional payment of NKr 1 per share if the acceptance level is above 90 per cent with such acceptance levels calculated on a fully diluted share basis."
"The offer price of minimum of NKr 11 and a maximum of NKr 12 per share represents a minimum premium of 38 per cent and a maximum of 51 per cent compared to the closing price of Eastern Echo shares on November 5th 2007, which was the last day before Eastern Echo informed the market that Schlumberger BV had expressed interest for the company."
"The Board has on November 6th reviewed the offer and would like to caution that the acceptance by Eastern Echo shareholders in the opinion of the Board will not represent the best alternative for the shareholders."
"Although the offer price represents a premium compared to historic prices, the Board of Eastern Echo is of the opinion that the offer price of NKr11–12 does not sufficiently reflect the value potential of Eastern Echo."
"Eastern Echo is now, together with ABG Sundal Collier Norge as its financial advisor, actively seeking alternative solutions and reviewing all options open to the company. Furthermore, several large shareholders, together holding approximately 15 per cent of the shares of Eastern Echo, have said that they consider the offer price too low. Thus, it is uncertainty whether Schlumberger BV will achieve an acceptance ratio of 90 per cent or more based on the current offer price."
"The Board would like to generally caution that acceptance by a significant number of Eastern Echo shareholders of any potential offer may influence the extent to which alternative options may be developed."