Pride International and Seahawk Drilling up for sale

Mike Schuler
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November 5, 2010

Dow Jones News Wire provided this article discussing the recent “for sale” announcement by Pride International, and their shallow-water jack-up drilling rig business, Seahawk Drilling.  They mention possible bidders to include Seadrill and ENSCO, but make no mention of Transocean or Stena Offshore. Via Wallstreet Journal:

NEW YORK (Dow Jones)–Offshore drilling companies Pride International Inc. (PDE) and former spinoff Seahawk Drilling Inc. (HAWK) have put up for-sale signs at the same time but are likely looking at different timelines in getting any potential deals done.

The Wall Street Journal reported late Tuesday that Pride is evaluating strategic options that could include a possible sale and has held discussions with Norway’s Seadrill Ltd. (SDRL) and London-based Ensco PLC (ESV), among other possible suitors. The same day Seahawk, which was spun off from Pride in August 2009, said it is looking at options to boost shareholder return, including a sale or recapitalization.

But the difference is Pride, whose largest business by revenue is deep-water drilling, has the luxury of time to weigh options, Raymond James analyst Collin Gerry said.

Seahawk, on the other hand, is burning through cash and needs a more immediate solution. The Houston-based company specializes in shallow-water drilling. Its stock has taken a beating, down 55% year-to-date, hurt by the company’s inability to receive permits for shallow-water drilling in the Gulf of Mexico following the Deepwater Horizon oil spill.

Shares of both companies spiked in early trading before the broader U.S. markets turned south. Pride was recently up 2.8% at $31.89 and earlier climbed as high as $33.42. The stock is essentially flat year to date. And Seahawk was recently off 1.5% to $9.97 but earlier rose as much as 8.2% to $10.95.

A Pride spokeswoman wasn’t immediately available to comment, while a Seahawk spokeswoman said the company doesn’t have a timeframe for completing its review and declined to comment further.

Global Hunter Securities analyst Matt Beeby said in the past, Pride has been resistant to an acquisition, so the report that it is exploring options indicates management is looking practically at the company’s businesses. Read full article

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