By Lawrence Yong
Yinson Holdings Bhd (YHB), whose share price has surged 70% over the last one month said that it has offered to buy Norway’s Fred Olsen Production (FOP) for Norwegian Krone (NOK) 995.74 million (RM552.34 million).
The integrated oil and gas service provider said it has offered to buy all 105.93 million outstanding shares of Fred Olsen at NOK9.40 (RM5.20), in a move that would more than double the mid-cap Malaysian company’s floating, production, storage and offloading (FPSO) assets.
“The proposed acquisition is in line with YHB Group’s plan to expand its marine-based business,” Yinson said in the announcement to Bursa Malaysia. “Upon completion of the proposed acquisition, YHB Group will have an additional three FPSOs, all of which are contracted with petroleum companies and should give YHB Group a steady income stream.”
The range of traded market price for FOP shares were NOK6.41 to NOK9.30 in the 12 months leading to June 7, when the offer was made, Yinson said. Its offer price was at a premium of 5.15% to 9.43% to FOP’s closing price, on the basis on five-day, one-month and three-months volume weighted average calculations.
FOP was incorporated in Norway in 1980 and listed on the Oslo Stock Exchange in May 2007. FOP and its subsidiaries have a fleet of three FPSOs (one which is owned on a 50/50 joint venture) and a Mobile Offshore Production Unit (MOPU). The FOP Group has offices in Singapore, Norway, Nigeria, Gabon and Houston. FOP’s largest shareholder, First Olsen Ltd, which owns about 61.54% of the company has pre-accepted Yinson’s offer.
To help finance the acquisition, Yinson carried out two rights issues in May. On May 31, it issued about 38.9 million new shares at RM2.82 per share to Kencana Capital Sdn Bhd, so that Kencana may own up to 15% of the company’s enlarged capital of 259.3 million shares. This would raise RM109.7 million, analysts said. In a previous rights issue on May 22, the company raised RM56 million.
Kencana Capital is owned by Mokhzani Mahathir, also a major shareholder of Malaysia’s biggest integrated service provider SapuraKencana Petroleum. Mokhzani is the son of former premier Mahathir Mohamad who is an advisor to oil major Petroliam Nasional Bhd or Petronas.
Lim Han Weng
Yinson’s major shareholders Lim Han Weng and Bah Kim Lian, who together hold up to 50.58% of the company, have agreed to approve the acquisition, Yinson said. The acquisition is expected to be completed by end August.
The Yinson Group currently owns three offshore support vessels as well as a floating storage and off-loading facility (FSO) via a joint venture with Petrovietnam Technical Services Corp. In addition, through a joint venture with PTSC entered into in June 2012, the YHB Group jointly with Petrovietnam ordered a FPSO, scheduled to be completed by end 2013.
Yinson’s shares rallied by over 50% in the last one week and were trading at RM4.76, an all-time high, before being suspended on Monday. For most of 2012, the company was trading at the RM1.50 to RM2 range.
The latest share price rally doubles the company’s market cap to nearly RM1 billion.
Upon completion of the FOP purchase, Yinson is expected to be among the top 10 FPSO leasers in the world, almost matching Malaysia’s leading FPSO leasing company, Bumi Armada Group.
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