TGS & Magseis Announce Recommended Voluntary Exchange Offer by TGS to Acquire All Shares of Magseis

Source: www.gulfoilandgas.com 6/29/2022, Location: Europe

TGS ASA and Magseis Fairfield ASA announce that they have signed a transaction agreement (the "Transaction Agreement") under which TGS will, subject to the fulfilment of certain conditions, make a voluntary exchange offer (the "Offer") to acquire all of the outstanding shares of Magseis for a consideration of 0.0426 TGS ordinary shares and NOK 2.30 in cash per Magseis share (the "Offer Consideration"). The Offer Consideration is equal to NOK 8.6048 per Magseis share based on the TGS closing price on June 28, 2022, and the Offer values Magseis's whole issued share capital at around NOK 2,333 million.

The board of directors of Magseis (the "Board") has unanimously resolved to recommend the Offer. Magseis shareholders, including the largest shareholder, Fairfield MS, LLC, and members of the Magseis Board and management, who collectively own 33.4% of the outstanding share capital of Magseis, have entered into pre-acceptances with respect to the Offer. These pre-commitment undertakings can on certain terms be withdrawn in the event of a superior competing offer that is not matched by TGS.

The Offer Consideration of NOK 8.6048 per Magseis Share represents a premium of:
- 53.7% compared to the closing price of the Magseis shares of NOK 5.60 on 28 June 2022.
- 37.4% compared to the volume weighted average price (“VWAP”) of the Magseis shares for the three-month period ending on 28 June 2022.
- 51.1% compared to the VWAP of the Magseis shares for the six-month period ending on 28 June 2022.
- 71.6% compared to the VWAP of the Magseis shares for the twelve-month period ending on 28 June 2022.

“With a strengthening focus on costs and cycle times in the exploration and production of oil and gas, an increasing amount of demand of geophysical data is driven by infrastructure-led exploration (ILX) and production monitoring (4D seismic). Combining Magseis’s leading position in the Ocean Bottom Node (OBN) market with TGS’ multi-client and data processing capabilities creates a unique offering of superior quality products and services across the value chain,” says Kristian Johansen, CEO of TGS.

“The seismic industry is undergoing a significant transformation brought about by fundamental structural challenges facing the industry. Adapting to these changes via consolidation will be beneficial to our investors and customers. The combined company will be a leading integrated seismic provider with a best-in-class OBN technology and track-record, strong data processing capabilities, and a multi-client business with a large customer base for the company's operations and a truly global geographical footprint.” says Carel Hooijkaas, CEO of Magseis.

Offer Consideration:
As of the date of this release, the Offer Consideration is equal to NOK 8.6048 per Magseis share and values the total issued share capital of Magseis at approximately NOK 2,333 million.

The Offer Consideration will be settled as follows:
- NOK 2.30 per Magseis share in cash (the “Cash Consideration”)
- 0.0426 new shares in TGS per Magseis share (the “Consideration Shares”) (the “Share Consideration”).

The board of directors of TGS has been authorized to issue the Consideration Shares to be delivered in the Offer. The authorization was resolved at the TGS general meeting on 11 May 2022. The Consideration Shares will be listed on Oslo Børs upon issuance to the accepting Magseis shareholders.

The Offer Consideration will be adjusted to compensate for the effects of any resolution by Magseis or TGS to distribute dividends or make any other distribution to Magseis’s or TGS's shareholders with a record date prior to completion of the Offer.

Key terms and conditions of the Offer:
Completion of the Offer will be subject to the following main conditions being satisfied or waived by TGS: (i) Magseis shareholders representing more than 90% have accepted the Offer; (ii) the Board has not amended or withdrawn its recommendation of the Offer; (iii) relevant regulatory approvals have been obtained; (iv) consents and waivers for change of control provisions in the Magseis's lease agreements and credit facilities have been obtained; (v) Magseis will in all material respects have conducted its business in the ordinary course; (vi) no breach of covenants and representations and warranties in the Transaction Agreement by Magseis has occurred that entitles TGS to terminate the agreement; and (vii) no legal action has been taken that will or might restrain or prohibit the completion of the Offer.

The Board has agreed that it will not amend, modify or withdraw its recommendation of the Offer unless it receives a bona fide superior competing offer that satisfies certain criteria. If the Offer is not completed due to a breach by Magseis that entitles the Offeror to terminate the Transaction Agreement, or the Board withdraws or amends its recommendation of the Offer, Magseis will compensate the Offeror for its external advisors costs up to a maximum amount of NOK 10 million.

The complete details of the Offer will be set out in an offer document which will be published after approval by Oslo Børs. The offer period is expected to commence in August 2022.

Availability of the Offer and/or Share Consideration is expected to be subject to legal restrictions in certain jurisdictions.

Advisors:
ABG Sundal Collier ASA is acting as financial advisor and Advokatfirmaet Schjødt AS is acting as legal advisor to TGS. Arctic Securities AS is acting as financial advisor and Advokatfirmaet Thommessen AS is acting as legal advisor to Magseis.


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