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Report: Seadrill covets Saipem drilling division

  • Seadrill (SDRL) reportedly is interested in buying Saipem's offshore drilling business in a deal that could cost as much as €3.9B.
  • Such a deal could be positive for both Saipem (SAPMY, SAAYY) and parent Eni (E) by cutting their debt levels, analysts say.
  • Proceeds from SDRL’s planned New York listing of its 74%-owned North Atlantic Drilling subsidiary could provide the funding for such an acquisition.
Comments (9)
  • Arthur Fisher
    , contributor
    Comments (223) | Send Message
     
    If JF were to play chess, he'd be a Grand Master: always thinking several moves ahead; always quick to take advantage of an opponent's slip.
    18 Nov 2013, 11:27 AM Reply Like
  • saratogahawk
    , contributor
    Comments (1567) | Send Message
     
    I have to admit that if true this one catches me by surprise.
    18 Nov 2013, 12:20 PM Reply Like
  • Debutant
    , contributor
    Comments (1900) | Send Message
     
    @ saratogahawk

     

    I follow you for your comments on this particular sector. Could you elaborate a bit on your comment, please? Thanks
    18 Nov 2013, 03:52 PM Reply Like
  • Debutant
    , contributor
    Comments (1900) | Send Message
     
    I believe in win-win deals, but, this report (above) suggests that it is win-win for the two sellers! I don't see the name of the potential buyer mentioned in the list, hence my note to Saratogahawk.

     

    What I'm trying to understand is how will this deal help the sellers "by cutting their debt levels", unless SDRL assumes their existing debt. And, if it does, then..... well, as a SDRL shareholder I had better find out quickly how much that debt is.
    18 Nov 2013, 04:00 PM Reply Like
  • saratogahawk
    , contributor
    Comments (1567) | Send Message
     
    If this report is true here's how I would see it with my first blush guess. And that is what I would call it right now just a guess. Saipem is a very large energy infrastructure business with a sideline offshore drilling business. However, they have some very attractive clients and locations: ENI, Total, Saudi Aramco, etc. Their drill rigs are mainly jackups and semisubs with 2 drillships and 1 tender. The ages of the jackups range from 1980 to 2010 so nothing compelling on the jackup equipment side. The drillships are 2000 and 2010 and again nothing particularly compelling about the equipment. The semisubs are generally older equipment so nothing compelling there. However, and the big guess is the however, the client base and the geographic locations (mainly the Persian Gulf and West Africa) are very compelling. If the equipment and the backlog comes along for a song then this is a good deal. If not I at a loss to justify it right now. I will say that Saipem has not had a good couple of years because of Eurozone financial issues so it could view offloading the offshore drilling business as a painful but necessary step.

     

    Overall, I don't believe this is a real deal yet. I will research some more and provide a little bit more guess to my guess.
    18 Nov 2013, 05:20 PM Reply Like
  • Debutant
    , contributor
    Comments (1900) | Send Message
     
    Thank you, Saratogahawk.
    I,too, am searching for more information here in European, but, as we all know, neither Italians nor SDRL are known for their communication skills.
    19 Nov 2013, 04:02 AM Reply Like
  • Not_Quite_Pheidippides
    , contributor
    Comments (149) | Send Message
     
    The last point doesn't make sense to me: North Atlantic is planning to get listed at the NYSE, not do an IPO. The company and stock are already public, so the NYSE listing doesn't raise funds (unless SDRL simultaneously sells a share of their stake in North Atlantic).
    18 Nov 2013, 02:03 PM Reply Like
  • Chip Oat
    , contributor
    Comments (46) | Send Message
     
    DNB says Saipem's fleet not a good fit with SDRL's; ITO, this won't happen.

     

    Also, the point about NATDF in the comment above is spot-on. The company's listing on the NYSE will raise no capital.
    18 Nov 2013, 02:17 PM Reply Like
  • Budavar
    , contributor
    Comments (1387) | Send Message
     
    JF appears to take us to a new level.
    19 Nov 2013, 07:38 PM Reply Like
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