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Proxy Advisory Firms ISS and Egan-Jones Recommend Rowan Shareholders Support Merger with Ensco
Friday 08 February 2019

8 February 2019 - US-based proxy advisory firms Institutional Shareholder Services, Inc. and Egan-Jones Proxy Services have recommended that shareholders of Texas, US-based contract drilling services provider Rowan Companies plc (NYSE: RDC) vote in favour of the company's pending merger with UK-based offshore drilling contractor Ensco plc (NYSE: ESV), the companies said.

As reported on 29 January 2019, Rowan and Ensco have amended the transaction agreement the companies entered into on 7 October 2018.

Under the amended agreement, upon closing Rowan shareholders will receive 2.750 shares of Ensco for each share of Rowan they own. All other terms and conditions of the agreement remain the same.

All other terms and conditions of the agreement remain the same.

Several Rowan shareholders have indicated their support for the transaction and the value creation opportunity that the pending combination presents to the company's shareholders.

In concert with the amended transaction agreement, Odey Asset Management LLP, one of Rowan's largest shareholders as of the most recent regulatory filings, has pledged its support to Ensco by entering into an irrevocable voting agreement for the firm's holdings of approximately 11.4m Rowan shares, or approximately 9% of Rowan's shares outstanding.

Under the original terms of the transaction agreement, Rowan shareholders would receive 2.215 Ensco shares for each Rowan share.

Upon closing, Ensco and Rowan shareholders will own approximately 60.5% and 39.5%, respectively, of the outstanding shares of the combined entity. There are no financing conditions for this transaction.

Based on the closing price of each company's shares on 5 October 2018, the estimated enterprise value of the combined company is USD 12bn.

The transaction is not subject to any financing conditions. The companies anticipate that the transaction will close during the first half of 2019.

The combined company will be domiciled in the United Kingdom, where both Ensco and Rowan are currently domiciled, and senior executive officers will be located in London and Houston.

Ensco plc (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. For more than 30 years, the company has focussed on operating safely and going beyond customer expectations.

Rowan has a current fleet of 27 mobile offshore drilling units, composed of 23 self-elevating jack-up rigs and four ultra-deepwater drillships.

The company's fleet operates worldwide, including the United States Gulf of Mexico, the United Kingdom and Norwegian sectors of the North Sea, the Middle East, the Mediterranean Sea, and Trinidad.

Additionally, the company is a 50/50 partner in a joint venture with Saudi Aramco, entitled ARO Drilling that owns a fleet of five self-elevating jack-up rigs that operate in the Arabian Gulf.

Morgan Stanley and Co. LLC is lead financial advisor to Ensco. HSBC Securities Inc. and Citigroup Global Markets Inc. also provided financial advice to Ensco. Ensco's legal advisors are Gibson, Dunn and Crutcher LLP and Slaughter and May.

The financial advisor for Rowan is Goldman Sachs and Co. LLC and its legal advisors are Kirkland and Ellis LLP and Latham and Watkins LLP.
Date Published: 08/02/2019
Target: Rowan Companies
Country: USA
Deal Size: 12bn (USD)
Sector: Petroleum/Natural Gas/Coal
Type: Merger
Financing: Stock
Status: Agreed
Buyer: Ensco
Buyer Advisor: Morgan Stanley and Co. , HSBC Securities , Citigroup Global Markets , Gibson, Dunn and Crutcher , Slaughter and May