(Updates with additional detail, background)
OSLO (Thomson Financial) - Takeover target Eastern Echo said a fairer
valuation of it would be above 20 nkr per share, after reiterating that the
11-12 nkr per share bid by US oilfield services group Schlumberger is too low.
"The offer price of a minimum of 11 nkr and a maximum of 12 nkr per share is
considered not to represent the fair value of the company," the Norwegian
seismic firm said.
"The board and management believe that the fair value of the company, based
on today's valuation of the industry, could be above 20 nkr per share."
Earlier this week Schlumberger made a cash bid of up to 3.67 bln nkr for the
Eastern Echo shares to expand its seismic survey operations serving the 61 pct
of the firm it does not already own.
Schlumberger wants Eastern Echo for its fleet of high-performance 3D seismic
vessels which are currently under construction, but the Norwegian firm has
already said it is not recommending the bid.
"Based on a day rate assumption of 250,000 usd per vessel, operating
expenses per day per vessel of 86,000 usd and certain other assumptions, Eastern
Echo will have a net result of approximately 220 mln, or 1.2 bln nkr, in 2010,"
the firm said.
This, Eastern Echo says, means Schlumberger would earn back its expenditure
in "less than three years, which the board finds unacceptably low".
Shares in the Norwegian firm, which only listed on the Oslo Bors recently,
are up more than 73 pct on the back of Schlumberger's bid.
alastair.reed@thomson.com
ar/ejb/ar/jlc
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