After its takeover offer was rebuffed by the restructured DOF Group, could Subsea 7 find a dance partner in Solstad Offshore?
Pareto Securities offshore analyst Joren Sovik Opheim told a standing room only crowd at the bank’s annual Energy Conference that Solstad Offshore fit what Kristian Siem-backed Subsea 7 was looking for when it made an offer for DOF in June ahead of its Oslo initial public offering.
“The statements they have made are quite clear: Assets are key in the upcoming cycle,” Opheim said, referring to statements from Subsea 7 management on the need for tonnage.
He said that Solstad Offshore and DOF had a fleet of subsea vessels of roughly the same size as Subsea 7.
The difference, Opheim noted, was capital structure.
DOF emerged from restructuring earlier this year, with the new-look company debuting on the Oslo Stock Exchange on 22 June trading at NOK 36.14 ($3.37).
Solstad Offshore sold 37 platform supply vessels to Tidewater in March in a move that slashed its debt by $570m to $1.2bn and lowered its exposure to the oil and natural gas market.
But the company still has to refinance that debt in the first quarter of 2024.
Siem, who serves as chairman of both Subsea 7 and the eponymous Siem Offshore, has small stakes in both DOF Group and Solstad Offshore.
The Norwegian shipping tycoon did not directly address any potential consolidation moves during his talk in the keynote kicking off the event.
He only said that consolidation is “a must when the market is down” but that it did not happen during the sector’s most recent downturn because owners had lost everything but management of their fleets.
Subsea 7 chief executive John Evans did not discuss acquisitions during his presentation, nor did DOF Group or Solstad Offshore.
Ahead of DOF’s return to trading, Subsea 7 offered NOK 35 per share in a mix of cash and stock, a 25% premium over the NOK 28 IPO price.
The offer, which valued DOF at NOK 4.5bn, was rejected with DOF arguing it was below what most shareholders were willing to sell during the pre-sounding period.
In July, Evans told investors Subsea 7 would be looking at chartering in tonnage after striking out with DOF.
On Wednesday, DOF shares hit an all-time high of NOK 51.90, eclipsing the previous high of NOK 51.75.
