Houston-based GulfMark Offshore (NYSE:GLF) today confirmed that it has received a non-binding, unsolicited proposal from competitor Harvey Gulf International Marine to combine the companies in an all-stock merger in which GulfMark would acquire Harvey Gulf.
Under the Harvey Gulf proposal, GulfMark stockholders would own 41.2% of the combined company and it would remain publicly listed.
Harvey’s Gulf’s offer comes less than one month after U.S.-based offshore supply vessel company Tidewater (NYSE: TDW) entered into a definitive agreement with GulfMark to combine the two companies.
The combination would a global leader in the offshore support vessel sector with a market capitalization of $1.25 billion based on Tidewater’s July 1 closing price. The transaction is not expected to close until the fourth quarter of this year.
Under the terms of the all-stock agreement with Tidewater, the company would retain the Tidewater name and GulfMark shareholders would hold 27 percent of the combined company.
The deal also includes repaying $100 million of existing GulfMark debt.
Led by Shane Guidry, Harvey Gulf is one of the largest privately-owned and operated marine transportation companies in the U.S. Gulf of Mexico. The company emerged from Chapter 11 bankruptcy in July after completing a court-approved financial restructuring which saw it shed approximately $1 billion in debt.
Both Tidewater and GulfMark also emerged from Chapter 11 bankruptcy in 2017.
According to GulfMark’s press release, Harvey Gulf‘s proposal letter stated that the company had an enterprise value is $900 million with $305 million of outstanding net debt, implying a total Harvey Gulf equity value of $595 million.
“Based on the foregoing, and GulfMark’s public equity valuation of $337 million as of the close of business on July 13, 2018, the last trading day prior to announcement of GulfMark’s proposed merger with Tidewater Inc. (NYSE: TDW), the Harvey Gulf 100% stock proposal would imply a combined equity value of $932 million, and a 41.2% ownership interest would imply a value of $384 million for GulfMark stockholders (or $37.93 per GulfMark share),” Gulfmark explained in a press release.
It was not immediately clear if Harvey Gulf’s offer represented a better offer than Tidewater’s.
GulfMark’s Board of Directors, with the assistance financial and legal advisors, was expected to review the Harvey Gulf offer “in a manner consistent with its fiduciary duties and in compliance with its obligations under its merger agreement with Tidewater,” the company said.
“GulfMark’s Board has not made any determination as to whether the Harvey Gulf unsolicited proposal constitutes, or could reasonably be expected to result in, a “Superior Offer” under the terms of the Tidewater merger agreement,” according to GulfMark.
“At this time, the GulfMark Board of Directors continues to believe that the Tidewater merger is in the best interest of GulfMark stockholders and continues to recommend that GulfMark stockholders adopt the Tidewater merger agreement at the special meeting of GulfMark stockholders to be scheduled for this fall,” GulfMark’s press release said.