By the OGJ Online Staff
HOUSTON, July 3 -- Engineering and construction contractor Technip SA made what it termed a friendly unsolicited offer for Coflexip SA and the Isis holding company.
Coflexip is a large contractor to the oil and gas industry. Isis is an Institut Français du Pétrole-founded technology sector holding company that owns stakes in several companies, including Technip and Coflexip.
Ongoing discussions between the three companies were accelerated because rumors of the deal were published.
Technip and Isis issued a proposed plan under which the three companies would combine. Coflexip said it has not approved the proposed offer and that its directors would meet soon.
Technip said the deal would create Technip-Coflexip, a "world-class leader in oil and gas engineering, products, and solutions" that would have the largest oil and gas services market capitalization in Europe. Technip has submitted the offer to regulatory authorities in France and the US for approval.
Technip will make a share exchange offer for Isis at the ratio of 12 Technip shares for 11 Isis shares. It said the deal offers a 56% premium over the market exchange ratio between Technip's and Isis' closing prices June 27. IFP has decided to commit its 52.8% of Isis capital to the new group, and has undertaken to buy back Isis's participation in Compagnie Générale de Géophysique and other nonlisted companies. Directors of Isis have recommended the offer, which is contingent on Technip's achieving 66.67% of voting rights in Isis after full dilution.
For Coflexip, Technip will offer 9 Technip shares for 8 Coflexip shares, a 22% premium over the ratio between shares of the two companies June 27, or an alternative cash offer of 193 euros/share, a 26% premium over Coflexip's closing share price June 27. The cash offer is limited to 50% of Coflexip's shares not owned by Technip.
Technip already owns 29.7% of Coflexip. The companies formed a strategic alliance in the offshore oil construction sector in 2000.
TotalFinaElf SA, which owns 2.7% of Coflexip's share capital and voting rights, intends to contribute its holdings to the exchange offer.
IFP, Gaz de France SA, and TotalFinaElf would hold, respectively, 10.6%, 6.7%, and 6.2% of Technip-Coflexip.
The combination would create a global company with "critical mass" in onshore and offshore engineering and construction; subsea construction; installation of flexible pipe systems; design and construction of refineries and petrochemical facilities; and other industries, said Technip. It added the proposed Technip-Coflexip had combined pro forma revenues of 4.5 billion euros in 2000.
Technip said the integration of Technip and Coflexip would save 50 million euros (pretax) next year and 85 million euros (pretax) per year by 2003.
