Ensco plc Announces Proposal to Increase Exchange Ratio for Combination with Rowan Companies plc

Ensco plc announced today that it has made a proposal to Rowan Companies plc to increase the exchange ratio for its all-stock combination with Rowan.

Under the terms of the proposal, Rowan shareholders would receive 2.600 Ensco shares for each Rowan share, a 17.4% increase from the exchange ratio of 2.215 contemplated by the transaction agreement dated October 7, 2018 between the parties. Upon closing, Ensco and Rowan shareholders would own approximately 57% and 43%, respectively, of the outstanding shares of the combined company. All other terms and conditions of the transaction agreement would remain unchanged. The proposal has been unanimously approved by Ensco’s board of directors.

Ensco’s Non-Executive Chairman of the board of directors Paul E. Rowsey III stated, “This enhanced proposal is a reaffirmation of our belief that this combination will generate significant long-term shareholder value and result in the creation of a leading offshore driller with substantial opportunities across water depths, geographies and market conditions. The combined company will boast some of the industry’s highest-specification assets, unparalleled geographic coverage, a diverse customer base and significant future revenue growth opportunities. Further, $150 million of anticipated annual synergies resulting from the transaction are expected to create $1 billion of capitalized value for shareholders of the combined company. We look forward to quickly executing an amendment to the definitive agreement and to consummating this transaction and delivering on the significant opportunities of the combined company.”

In addition to a leading offshore fleet with a vast geographic presence, the combined company will have the industry’s broadest customer base, with continued focus on customer satisfaction and the development of new technology to differentiate services and lower costs. As a result of significant synergies, the transaction is expected to be accretive to cash flow per share in 2020. The combined company would also have a strong financial position with $3.7 billion of total liquidity, $2.6 billion of contracted revenue backlog and an enhanced credit profile that enables the combined company to better compete across market cycles¹.

Ensco’s Board and senior management team are committed to the combination of the two companies, which will benefit shareholders, customers and employees of both companies. However, this proposal is final and represents the maximum exchange ratio that Ensco is prepared to offer.

Source: BUSINESS WIRE