Lamprell, an oil equipment and services company based in Dubai, plans to turn to shareholders for two thirds of the cash needed to buy out a competitor.
The proposed US$336.1 million (Dh1.23 billion) acquisition of Maritime Industrial Services (MIS), an oil services company based in Sharjah, is also to be financed through cash reserves and bank loans, according to a statement Lamprell issued to investors yesterday.
About $213.2m of the full bid amount is to come from a rights offer to shareholders, a popular method for companies to finance acquisitions.
"The share price reaction is a strong one today, which suggests that the market likes the deal," said Phil Lindsay, an analyst with ABN AMRO in London.
The buyout still needs to be formally approved by shareholders.
Shares of Lamprell, one of the 350 largest companies listed on the London Stock Exchange, were up more than 10 per cent yesterday, reaching 389 pence in intraday trading.
MIS, which is listed in Norway, recorded its biggest increase in 14 months, climbing to 37.7 kroner on the Oslo Stock Exchange.
The rights issue is to be backed by JPMorgan Cazenove, HSBC and Merrill Lynch. Shareholders will receive three shares for every 10 they own.
Lamprell, which expects the acquisition to be completed in July, said MIS would help it increase earnings per share "substantially".
"There is a strong complementary fit between Lamprell and MIS, enabling the enlarged group to pursue new opportunities with enhanced resource and technical competence," Nigel McCue, the chief executive of Lamprell, said in yesterday's statement.
"In particular, we see real competitive advantage in the companies' combined engineering offering as well as greater access to new business in the downstream and onshore sectors."
MIS offers Lamprell footholds in Saudi Arabia and Kuwait. Integrating the two companies is expected to cost about $6m.
"It's a case of tearing the fence down," said Mr Lindsay.
The acquisition is also to provide Lamprell with a bonus. MIS had been building a $160m jack-up rig when its client was struck by the financial crisis.
Only $26m is expected to be needed to complete the job, and Lamprell is expected to pocket $130m once construction of the rig has been completed next year.
ayee@thenational.ae
Unresolved crisis
Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.
Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.
The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.
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Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
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Saturday, April 20: 11am to 7pm - Abu Dhabi World Jiu-Jitsu Festival and Para jiu-jitsu.
Sunday, April 21: 11am to 6pm - Abu Dhabi World Youth (female) Jiu-Jitsu Championship.
Monday, April 22: 11am to 6pm - Abu Dhabi World Youth (male) Jiu-Jitsu Championship.
Tuesday, April 23: 11am-6pm Abu Dhabi World Masters Jiu-Jitsu Championship.
Wednesday, April 24: 11am-6pm Abu Dhabi World Professional Jiu-Jitsu Championship.
Thursday, April 25: 11am-5pm Abu Dhabi World Professional Jiu-Jitsu Championship.
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This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
