Hercules buying majority stake in Discovery

Hercules Offshore buys majority stake in Discovery Offshore; selling Domestic Liftboat assets

Associated Press

HOUSTON (AP) -- Hercules Offshore has purchased a majority stake in Discovery Offshore and is selling its Domestic Liftboat assets for about $54 million.

Hercules said it now has more than a 50 percent interest in Discovery Offshore SA. It will pay $2.46 per share in direct transactions with certain selling stockholders of the Luxembourg company.

Under the Norwegian Securities Trading Act, Hercules said it will make a mandatory cash tender offer for all remaining outstanding shares of the company.

CEO and President John Rynd said Monday that Discovery is close to completing the construction of two jackup rigs that will help to broaden the services that Hercules can offer.

The sale of the Domestic Liftboat assets, which includes 29 marketed liftboats, 10 cold-stacked liftboats and related assets, is expected to close in early July. It anticipates an approximately $4 million impairment charge related to the deal.

The sale is part of Hercules focus on "more profitable markets with a positive longer-term outlook, such as our U.S. Gulf of Mexico and international drilling operations and our international liftboat business," Rynd said.

Hercules Offshore Inc. said last month that it would sell the bulk of its inland barge rigs. The company is selling 11 inland barge rigs, three of which are active, for $45 million. It has a separate agreement to sell its Hercules 27 rig for $5 million. The company did not disclose the buyers.

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