Deals Report: Offshore Slowdown Putting Drilling Companies in Play

by: Alacra Pulse Check Blog

By Sheena Lee

Companies like Vantage Drilling (NYSEMKT:VTG) and Seahawk Drilling (NASDAQ:HAWK) could become potential acquisition targets as M&A among offshore drillers is likely to accelerate, according to Bloomberg Businessweek: “Intensifying government scrutiny and rising customer demands may crank up costs so high that only the largest companies can compete, bankers and analysts say. There were $5.3 billion worth of deals involving drillers last year, more than triple the total in 2009.”

Seahawk has suffered so much from the slowdown in offshore drilling since the Gulf of Mexico spill that it is considering selling rigs — maybe the entire company.

“If we get a good offer, we’re on the block,” Randall Stilley, Seahawk’s president and chief executive officer told the Toledo Blade last month.

FBR Capital (FBCM) earlier this month reiterated an Outperform rating on Vantage and raised its 12-month price target from $2.30 to $2.40, according to StreetInsider.

Deal Updates

Swiss pharmaceutical giant Novartis (NYSE:NVS) said that it had agreed to buy Genoptix (GXDX), an American oncology laboratory, for $470 million in cash. Genoptix shares were up 25% this morning on the news. Pulse mentioned Genoptix as a takeover target on Dec. 15.

French drug maker Sanofi-Aventis (NYSE:SNY) said that its $69-a-share tender offer for all outstanding Genzyme (GENZ) common stock, which was to have expired on Friday, had been extended to Feb. 15.

Other Deal Activity

Standard Chartered (OTCPK:SCBFF) said it had agreed to buy GE Money Pte., an auto and personal loan company in Singapore, for an undisclosed sum. GE Money had $1.8 billion in assets at the end of 2010, Standard Chartered said, according to DealBook.

Hong Kong billionaire Li Ka-shing is poised to make a 3.5 billion pound offer to E.ON (OTCPK:EONGY), Britain’s second-largest electricity distribution network, per Reuters.

Jack Wolfskin, the German outdoor-clothing and equipment maker known for its paw logo, is drawing interest from private-equity firms including BC Partners and Blackstone Group (NYSE:BX), per Bloomberg Businessweek.

RockTenn (RKT) said that it had agreed to buy Smurfit-Stone (NYSE:SSCC), a maker of packaging products that emerged from bankruptcy protection last year, for $3.5 billion in cash and stock, per DealBook.

Brazil’s Banco Bradesco (NYSE:BBD) and Citibank (NYSE:C) have shown interest in buying Banco PanAmericano, the Brazilian bank that received an emergency capital injection last year, per Reuters.

Abu Dhabi’s Etihad Airways has expressed “top level interest” in Richard Branson’s British airline Virgin Atlantic, per Reuters.

French food group Danone (OTC:GDNNY) is looking for acquisitions in India, and baby-food maker Dumex India could be a target, per Reuters.

The main players on the Romanian capital market, including the representatives of CNVM, SIFs and the leaders of the two Bourse operators, the BSE and Sibex, met in Predeal during the weekend and decided to resume the merging process, per ZF.