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Energy

Transocean: Good News for Merger with Transocean Partners

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Transocean to increase to 1.2 shares from 1.1427 the consideration for its pending acquisition of each Transocean Partners common unit it does not already own

The much awaited merger between Transocean LTD (NYSE:RIG) and Transocean Partners LLC (NYSE:RIGP) – the fate of which has remained undecided for long, finally takes a new turn. Both the companies have announced about the increase of shareholding by Transocean to 1.2 shares from 1.1427, the consideration for its pending acquisition of each RIGP common unit it does not already own in a share-for-unit merger transaction. Following the news, Transocean Partners stock price jumped up 6.8%.

The news comes ahead of the recent failure to receive 50.1% shareholder votes that are mandatory for the merger to close. Transocean now aims to issue around 23.8 million shares for the deal to reach completion.

At present, the merger depends on the approval of the common unit holders of RIGP. Transocean shareholders have voted for roughly 21.3 million common units in support of the transaction but for the deal to close, a vote in approval for the deal by nearly 9.9 million of 19.7 million common units not held by Transocean are still needed for final closure. The transaction is now expected to complete, early next month, given that it gains customary terms and conditions.

A special meeting of RIGP that was adjourned would now be held on Tuesday, at 15:00 hours local time, at the company’s office on George Street, London.

Increase in shareholding for consideration purposes was approved by the Conflicts Committee on behalf of RIGP Board of Directors – all that are unassociated and independent of Transocean.

In our last article that covered the potential downsides for both the companies given that the merger fails to complete, The Country Caller was already quite confident that the merger would near completion. This is because earlier the companies had already received 46.8% of votes in favor of the deal, meaning 75% of the shareholders of the companies were already supporting the deal and thus, we saw nothing dramatic in any obstacles that the merger faced previously.

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