ENSCO PLC (NYSE:ESV) Closes In Deep Red

0
1872

In the last trading session, the stock price of ENSCO PLC (NYSE:ESV) declined more than 5% to close the day at $5.22. More recently, Arrowgrass Capital Partners (US) LP had sent an open letter to the company’s shareholders urging them to vote against company’s anticipated merger deal with Atwood Oceanics, Inc.

The details

The letter mentioned that the opportunity to vote on the anticipated Atwood deal at the October 5, 2017 meeting is quickly coming. Market and industry events have deepened their conviction that this merger destroys value for Ensco shareholders as it is the wrong merger at the wrong time and the wrong price. Therefore, they urge fellow shareholders to not cast vote in the favor of the deal directly on Ensco’s proxy card.

Investors needing assistance with voting with questions should contact Morrow Sodali, which is helping Arrowgrass. The entity offer access to their materials opposing this deal, which have initially been submitted with the Securities and Exchange Commission and are available at www.sec.gov. Fellow shareholders should feel authorized to save Ensco from this poor deal.

Arrowgrass has been in against of this Atwood merger for numerous reasons. It believes that even based on management’s estimates, this deal is dilutive on all applicable metrics. The proposed Ensco and Atwood stock exchange ratio shows an unjustifiable premium. Moreover, this merger comes at a time when Atwood faces a liquidity barrier while burning cash and there exists no urgency to bail them out at a big premium. This merger also inappropriately heightens risk by shortening runway and flagging the balance sheet, while giving away considerable upside in a recovery. Ensco is not just acquiring assets, but it is also offering stock on unacceptable terms.

Ensco management has taken immense pains to contend that they are purchasing high-quality, desirable assets at a suitable price, but ignores the query on which they are actually voting, and that is issuing shares.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.