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Ocean HeavyLift ASA (OSL:OHL) On 5 September 2008, Spencer Energy AS (the "Offeror"), made a mandatory offer for all of the shares in Ocean HeavyLift ASA (the "Company" or "OHL") at an offer price of NOK 36.00 per share (The "Mandatory Offer"). Detailed information about the Mandatory Offer is set out in the offer document from the Offeror dated 3 October 2008 (the "Offer Document"). The Offer Document has been approved by Oslo Børs ASA ("Oslo Børs" or "OSE") pursuant to section 6-14 of the Norwegian Securities Trading Act.
This statement is made by the Board of Directors (the "Board") of the Company pursuant to section 6-16 of the Norwegian Securities Trading Act in connection with the Mandatory Offer.
The board member Jon C. Syvertsen has declared himself disqualified and has abstained from participating in the deliberations leading to and the issuance of this statement.
The Board has engaged Pareto Securities AS ("Pareto") to consider the Mandatory Offer and the offered price for the purpose of providing a fairness opinion. The Board has also retained Pareto to identify alternative solutions in the interest of all the shareholders.The Board has consulted the law firm Wikborg, Rein & Co. during the offer process as deemed needed.
Employees and location According to the Offer document the Offeror intends to leverage the best strategies and personnel in both organisations in order to effectively compete in the marketplace. This may involve changes to the workforce of Ocean HeavyLift. The strategic review may also result in a reorganisation of the company and its legal structure.
Fairness Opinion Pareto has reviewed the Offer and has issued a fairness opinion to the Board, dated 30 October 2008. Pareto has stated that they are of the opinion, subject to the further conditions of the fairness opinion, that the offer price does not reflect the underlying values in the Company and hence does not reflect a fair value to the shareholders, given that the Company is a going concern based on current replacement asset values, contracts and near-term market outlook. However, Pareto recognises that certain other factors such as the current financial markets in general and the relative valuation of other publicly traded shares within comparable market segments may justify a current discount to underlying fair values. Consequently, Pareto is of the opinion that higher values could be realized through long term holding of the Company's shares.
Considerations Taken into consideration available information and advice from Pareto, the Board point out as of the date of this statement, the following considerations of importance for the shareholders to consider in respect of the Mandatory Offer:
* The Board is of the opinion that fair values both based on Discounted Cash flows and replacement values are significantly higher than the Offer Price, however these measures are typically higher than reflected by current share prices also for other companies with publicly traded shares within comparable market segments.
* The Offeror announced on 5 September 2008 that the duty to give a mandatory offer had been triggered through trades in the market at NOK 35.5 per share. Prior to this date, the closing price of OHL shares on Oslo Børs had never been below NOK 38 per share. Accordingly, the Mandatory Offer does not reflect a premium to the trading price prior to the announcement of the Mandatory Offer. Following the announcement of the Mandatory Offer, the trading price has remained in the range of NOK 32.5 to NOK 39 per OHL share. During this period the OSE and world wide financial markets have been undergoing a financial crisis, and the Bench mark index of Oslo Børs has fallen from 371 on 5 September 2008 to 244 on 6 November 2008, a decline of approx 34%.
* According to the Offer Document, the Offeror intends to compulsory acquire the remaining shares of the Company if the Mandatory Offer leads to a total ownership for the Offeror of 90% or more of the shares of the Company ("squeeze out"). In the event the Offeror is not in position to conduct a squeeze out, shareholders who have not sold their OHL shares will continue as a shareholder in a company which could be under the effective control of the Offeror.
* The Offeror reserves its right to propose to the general meeting of the Company to apply for a delisting of the shares from Oslo Børs. Such proposal requires the approval of a 2/3 majority to be resolved. Based on the OSE de-listing practise, the Company will not necessarily be de-listed even if the requirement for 2/3 majority in the general meeting of the Company is fulfilled. The OSE de-listing practice shows that factors such as the number of minority shareholders, the free-float and the opposition amongst minority shareholder may lead to dismissal of the application for de-listing if the major shareholder does not own 90% or more. Shareholders, who do not sell their OHL shares, risk however that the Company is de-listed from the OSE and that the information requirements for listed companies are not upheld by the Company as an unlisted company.
* Should the Offeror not reach an ownership level of 50 % of the outstanding shares by the end of the Offer Period, subsequent share purchases by the Offeror bringing them to a shareholding of 50 % or more, will create an obligation for the Offeror to put forward a new mandatory offer at the highest price paid by the Offeror in the preceding 6 month period. Should the Offeror, in connection with the Mandatory Offer, reach an ownership level of 50 % of the outstanding shares by the end of the Offer Period, the Offeror can freely purchase shares in the market without further obligations to present offers to all shareholders.
* The Board has in the interest of all the shareholders and in compliance with the Corporate Governance policy of the Company, retained Pareto as financial advisor in connection with the Mandatory Offer. Although the Board with the assistance of the financial advisor have reviewed other alternatives to the Mandatory Offer, so far, no bids have been received.
Based on the conflicting arguments of the underlying value and the recent developments in share prices, the Board can not conclude whether to recommend the shareholders to accept or not to accept the Mandatory Offer. The Board refer to the above mentioned factors of importance which, in the view of the Board, may be of relevance when the shareholders evaluate the Mandatory Offer.
As of the date of this statement, the only member of the Board personally controlling shares in the Company is the chairman Erik Gløersen. Mr. Gløersen has not decided whether to accept the Mandatory Offer or not to accept.
Oslo, 7 November 2008 The Board of Directors of Ocean HeavyLift ASA
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