ENSCO PLC (NYSE:ESV) reported that proxy advisory entity Glass Lewis has recommended that company’s shareholders vote in favor of the proposed all-stock deal with Atwood Oceanics, Inc. at the firm’s upcoming GM of shareholders on October 5, 2017.
Carl Trowell, the CEO and President of Ensco, reported that they are delighted that Glass Lewis recognizes the exciting financial and strategic merits of company’s acquisition of Atwood and has requested investors to support this combination. They consider the offshore drilling segment is moving into a recovery phase after an extended slump and that now is the time to do counter-cyclical investments in the best-specification assets to create long-term shareholder value.
The company is already witnessing asset pricing for these rigs start to inflect and, going forward, they consider the pricing of these assets will rise sharply provided the limited count of these rigs in the international supply and intense competition from other drillers seeking to buy top-quality assets at all-time cyclical lows.
By adding Atwood, at a prime juncture in the market cycle, they are buying top-quality assets at an interesting price showcasing cyclical lows, furthering their ability to fulfill increasing consumer demand and strengthening their competitive position, which together with notable anticipated synergies, will generate substantial, long-term value for company’s shareholders.
Ensco CEO expressed that with Atwood, they will become a larger firm, with a top-quality rig fleet, which will considerably enhance their access to liquidity and offer them with increased financial flexibility at a major point in the market recovery. As they move through the next phase of the market cycle, they will continue to finalize disciplined capital deployment decisions that sustain their flexibility and financial strength and best position company in the offshore recovery.
Since reporting the deal, the company has engaged with numerous shareholders and they are delighted with the support they have obtained for the deal and the recognition of the notable value this deal will create.