SDRLF.pk (NOK 156.00 = USD 31.51) UPDATE 1-Seadrill says Pride stake a financial investment
Tue Apr 22, 2008 11:17am EDT
OSLO, April 22 (Reuters) - Oilfield services group Seadrill (SDRL.OL: Quote, Profile, Research) said on Tuesday it considered its acquisition of a near 10 percent stake in U.S. driller Pride International (PDE.N: Quote, Profile, Research) a financial investment.
Some analysts speculated Seadrill could have bigger aims for the stake in Pride, which says it is one of the world's biggest offshore drilling contractors with a fleet of 64 rigs.
Houston-headquartered Pride International said earlier on Tuesday that it had been notified by Seadrill and affiliates that they had control of about 9.9 percent of Pride's stock through undisclosed forward agreements and other purchases.
Pride said Seadrill had asked it not to disclose its acquisition, but the U.S. company said it chose to announce the stake in the interest of shareholders in line with a 2001 stockholder rights plan.
"The Board of Directors of the Company has taken the action announced today with respect to the rights plan because Seadrill has not provided the Company with any information about its intentions, and the Board wants to make sure that all stockholders are protected appropriately," Pride said.
It said that plan was "intended to protect the Company's stockholders from open-market accumulations and other abusive takeover activities."
Pride shares traded up 6 percent on the New York Stock Exchange at $42.87. Seadrill shares ended up 4 percent in Oslo at 156 Norwegian crowns.
But Seadrill denied it had strategic ambitions.
"We look upon this as a financial investment," Seadrill Chief Operating Officer Alf Thorkildsen told Reuters.
Asked if the shareholding could be a step to taking over a U.S. driller, he said: "I have no further comment."
Oslo-listed Seadrill Ltd is the oil drilling company formed by Norwegian shipping tycoon John Fredriksen. The firm, which bought Norwegian rig group Smedvig in 2006 to become a major player, has said it wants to be a world leader in the industry.
"They always say it's a financial investment -- we have to see about that," said Nordea Markets analyst Ingolf Gillesdal. "It could be a good fit I believe."
But another analyst, who asked to remain anonymous, said Seadrill had made similar moves in the past, buying and selling stakes in rival drillers such as Ocean Rig (OCRA.OL: Quote, Profile, Research), Apexindo and Odfjell Invest without swallowing them up.
"Obviously they don't show their cards. But Seadrill has done transactions like this several times so it's not unlikely that this is a financial investment," he said. (Reporting by John Acher and Ole Petter Skonnord; editing by Elaine Hardcastle)
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