(Updates with new statement from Schlumberger)
OSLO (Thomson Financial) - Schlumberger said it is to improve its offer for
Norwegian seismic firm Eastern Echo to 12 nkr per share from the previously
announced 11-12 nkr depending on conditions, but this is still well below the 20
nkr price which Eastern says would be fair.
Following a firm rejection of the approach from Eastern earlier today,
Schlumberger said it has decided to "simplify the offer" by abandoning the
two-tier offer price structure.
"The reaffirmed offer of 12 nkr per share applies to all Eastern
shareholders, including those who sold their shares to Schlumberger after the
close of trading on Nov 5, 2007," it said.
The US oil services firm also said it has reduced the minimum level of
acceptance from 67 pct to 50.1 pct in an attempt to secure the takeover.
Earlier today, Eastern said it believes a fairer valuation of it would be
above 20 nkr per share, while reiterating that the 11-12 nkr per share bid 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.
At 2.30 pm, the Norwegian company - which only listed on the Oslo Bors
recently - was up 1.48 pct at 13.70 having gained 72 pct in the last week on the
back of Schlumberger's bid.
The US company wants Eastern Echo for its fleet of high-performance 3D
seismic vessels which are 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 company said.
This, Eastern Echo says, means Schlumberger would earn back its expenditure
in "less than three years, which the board finds unacceptably low".
alastair.reed@thomson.com
ar/ejb/ar/jlc/ar/ejb
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