Ensco Urges Shareholders to Approve Atwood Oceanics Acquisition

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Ensco Urges Shareholders to Approve Atwood Oceanics Acquisition PART 1 OF 4

Ensco’s Big Day Is Near—What Investors Should Know

Big day

The big day for Ensco (ESV) is approaching, which investors are eagerly waiting. On October 5, 2017, investors are scheduled to vote for or against Ensco’s pending acquisition of Atwood Oceanics (ATW). Ensco has asked its investors to vote for this acquisition. On the other hand, Arrowgrass Capital Partners—Ensco’s shareholder—urges shareholders to vote against the acquisition.

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Stock performance

On May 30, 2017, Ensco announced its plan to acquire Atwood Oceanics. Since then, Ensco’s stock price has fallen 14.5% through September 25, 2017. Its stock price is 34.8% higher since the start of September. 

Following are the month-to-date returns of other offshore drilling (XLE) stocks:

  • Atwood Oceanics (ATW): rose ~36.1%
  • Diamond Offshore (DO): rose 27.3%
  • Noble Corporation (NE): rose 36.5%
  • Transocean (RIG): rose 22.9%
  • Rowan Companies (RDC): rose ~23.1%
  • Seadrill Partners (SDLP): rose ~15.2%

Acquisition highlights

According to the agreement, ATW’s shareholders would receive 1.6 shares of Ensco for each share of ATW stock. The pro forma company would have a diverse geographical base with drilling (IYE) contracts in almost every major offshore basin around the world: the Gulf of Mexico, Brazil, North Sea, the Mediterranean, Asia-Pacific, and West Africa.

Ensco’s management won’t change, and the company would continue to trade on the New York Stock Exchange under the same ticker, ESV.

Series overview

Ensco issued a press release on September 25, 2017, to reaffirm the strategic and financial rationale behind ATW’s acquisition. In this series, we’ll examine the details of this acquisition. 

We’ll examine why Arrowgrass Capital Partners is urging shareholders to vote against this acquisition. Finally, we’ll see how investment banks have reacted to this acquisition news.


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