HAMILTON, Bermuda, Dec. 13, 2006 (PRIME NEWSWIRE) -- Seadrill disagrees strongly with the decision of the Appeals Board of the Oslo Stock Exchange announced this morning. The conclusion does not reflect the facts known to Seadrill. Seadrill maintains that no agreement or understanding ever existed between Carnegie and itself in relation to Eastern beyond the purely financially founded TRS agreements.
No facts to the contrary have been cited as a basis for the decision.
The board of Seadrill will review the decision and its reasoning in detail in the coming days and consider its options on this basis. At present these include both the making of a new mandatory offer in line with the requirements of the decision, reducing its stake in Eastern below 40 percent as well as referring the decision to the ordinary courts for review.
A final decision in relation to a potential new mandatory offer cannot be made until the Oslo Stock Exchange has announced the applicable price. Seadrill will, in this context, point to the fact that Eastern, following the conclusion of Seadrill's TRS agreements in May based on an Eastern share price of NOK 132.706, completed a substantial share capital increase with certain preferential rights to existing shareholders at a share price of NOK 90. The effect of the benefit of these preferential rights distributed to its shareholders will have to be reflected in the offer price.
Senior vice chairman of Seadrill, Tor Olav Troeim, says in a comment:
"The decision to enter into the TRS agreements with Carnegie was taken on the basis of Oslo Boers's circular 01/2003 where it is specifically stated that such arrangements have no influence on the obligation to make a mandatory offer. This position was supported by Oslo Stock Exchange's normal practice, illustrated in the Rieber case.
"When the Appeals Board has disregarded this without any warning and furthermore, has consolidated Seadrill and Carnegie without any facts supporting the same, there is obviously a need to have the matter reviewed by the courts.
"Seadrill is deeply concerned about the consequences of the Appeals Board's decision not to allow it to reduce its stake in Eastern. The long-term effect of this is that the risk for any subsequent challenge to a bid price has been placed solely on the offeror. In practice, the Appeals Board has fined Seadrill in excess of US$100 million for a possible breach of a reporting issue which is still not decided by Kredittilsynet.
"Seadrill has, since its incorporation, built a good support in the international capital market. This support has been founded on the principle that the company acts in a correct and professional way in the market and always observe a strict standard of fairness in relation to its dealings with investors. Seadrill is obviously sensitive to any issues which can reduce the trust thus established in the investor market.
"In view of this, Seadrill is inclined to proceed with the mandatory offer for the remaining shares in Eastern. Such offer will, however, need to be based on an offer price which Seadrill believes adequately reflects the various facts and circumstances not discussed in the Appeals Board's decision, notably the effect of the substantial capital increase in Eastern and the value of the preferential rights then provided to its shareholders. Seadrill will commence a dialogue with the Oslo Stock Exchange in order to resolve this as soon as possible.
"Seadrill will, if a mandatory bid is made, challenge the decision of the Appeals Board in the courts by filing a case against the Oslo Stock Exchange and the Ministry of Finance holding these responsible for any loss incurred as a consequence thereof.
"Summing up the decision and its consequences, I believe it highlights the lack of clarity in the Oslo Stock Exchange rules and regulations at present and a tradition for changing attitudes from the regulatory authorities to matters of substantial economical importance without warning to the market. This fact is a major concern for Seadrill and its affiliated companies when they consider their long-term relationship with the Norwegian capital market and the Oslo Stock Exchange. The board of Seadrill is, based on this, likely to advance the plans to move the primary listing of the company's shares to London or New York."
Seadrill Limited Hamilton, Bermuda December 13, 2006