Strategic, but expensive
Transocean’s acquisition of Songa Offshore should strengthen its position in the North Sea, a niche market on which we are positive. However, the deal is expensive and we would not be surprised to see Transocean trade meaningfully lower today. On a relative basis, we estimate Transocean is paying USD160m–210m more per rig than its own valuation, resulting in a total premium of USD1.6–2.1 per Transocean share to its current valuation. Also, to justify the implied value paid per rig, we estimate that long-term dayrates for harsh semis need to be cUSD450k, roughly twice the current level.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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