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CH Offshore rejects buyout bid from Falcon Energy

CH Offshore rejects buyout bid from Falcon Energy
Offshore services firm CH Offshore has rejected a takeover bid by Energian, subsidiary of Falcon Energy Group, as the offer is deemed to undervalue the company.

CH Offshore has decided not to accept Falcon Energy’s offer in the best interest of its shareholders, after the takeover bid was proposed in December 2014.

CH Offshore’s appointed financial adviser Provenance Capital said “the financial terms of the offer, on balance, are not fair and not reasonable”.

In December 2014, Falcon Energy offered SGD0.495 ($0.37) per share to shareholders of Singapore-listed CH Offshore, representing a 6.45% premium over the last closing price of CH Offshore shares before the takeover bid was announced.

Energian is the largest shareholder of CH Offshore with a 29.07% ownership after acquiring the stake from Malaysia’s Scomi Marine Services in April 2010.

Falcon Energy has plans to expand its business by acquiring more vessels for its operations in Asia Pacific, Mexico, West Africa and the Middle East. CH Offshore currently operates a fleet of 15 OSVs, including nine wholly-owned AHTS vessels.

Meanwhile, CH Offshore has reported lower profit but higher revenue in the first half of its financial year ended 31 December 2014.

Net profit for the six-month period was recorded at $11m, down 21.9% compared to $14.1m in the same period of the previous financial year.

Revenue rose 4.6% year-on-year to $11m due mainly to higher fleet utilisation.

“The current OSV market continues to be challenging and highly competitive due to the sharp decline in global oil price in recent months. In light of this, we expect the charter rates to remain weak,” CH Offshore commented.