TGS Board and Management recommends termination of mergerNews // August 22, 2008
The Board of Directors and the Executive Management of TGS-NOPEC Geophysical Company have recommend to the company's that it terminate the merger process with Wavefield Inseis and seek compensation of up to US$700 million.
Said TGS-NOPEC: "During the past 12 months, TGS-NOPEC Geophysical Company has worked diligently to make the merger with Wavefield Inseis a success. In contrast, Wavefield has consistently objected to completing the agreed and approved merger since October 2007, and has required improvements in the favour of Wavefield shareholders as conditions to complete the merger."
"In recent weeks we have made our best efforts to find an amicable solution that could lead to a successful merger. Despite the willingness from TGS to increase the exchange ratio and change both the constitution of the Board and the management reporting structure, Wavefield management was unable to demonstrate to our satisfaction an enthusiastic commitment to a true integration of the two companies," said Hank Hamilton, CEO of TGS-NOPEC.
"The Management and the Board of TGS are unanimously of the view that a friendly merger is no longer possible, and that a merger now would subject TGS and its shareholders to unacceptably high operational and financial risks that will likely lead to value destruction. In conducting its evaluation TGS has placed more emphasis on the actions taken by Wavefield management than statements by them that might seem to contradict such actions. Therefore, TGS has concluded that a merger with Wavefield is not in the best interests of its shareholders."