RDC $40.77 Why is Rowan selling its rig maker?? Hmmmm....
UPDATE 1-Rowan to sell or spin off manufacturing unit
Mon Mar 31, 2008 10:39am EDT
March 31 (Reuters) - Rowan Cos Inc (RDC.N: Quote, Profile, Research), a provider of contract drilling services, said it would pursue a sale or a spin-off of its wholly owned manufacturing unit, LeTourneau Technologies Inc, sending its shares up more than 8 percent.
Rowan said it would be assisted in the process by its financial advisers, Lehman Brothers Inc (LEH.N: Quote, Profile, Research) and Morgan Stanley & Co Inc (MS.N: Quote, Profile, Research).
The company also said that it entered into a pact with Steel Partners II L.P., which owns a 9.1 percent stake in Rowan, and added that Steel Partners had agreed to withdraw its slate of three nominees to Rowan's board.
In January, Steel Partners had said it was seeking three seats on Rowan's board, adding that its nominees, if elected, would work with the board and management "to implement a strategy to unlock that intrinsic value of the company."
According to the pact with Steel Partners, if Rowan does not monetize LeTourneau by the end of 2008, either Warren Lichtenstein, managing member of Steel Partners, or another person designated by Steel Partners will be added to Rowan's board effective Jan. 1, 2009, Rowan said in a statement.
If the monetization is completed through an initial public offering of LeTourneau shares or a private sale, Rowan will repurchase at least $400 million of its outstanding common stock, the company said.
LeTourneau, which supplies offshore jack-up drilling rigs, built the world's first jack-up drilling rig in 1955.
Rowan shares were up 8.13 percent at $40.96 in morning trade on the New York Stock Exchange. (Reporting by Sharangdhar Limaye in Bangalore; Editing by Himani Sarkar)
