Enjoying solid M&A premium

In our view Transocean’s bid is at a significant premium to underlying values (reflected in Transocean trading down yesterday), and values the CAT-D rigs at USD850m each (versus a construction cost of cUSD700m), including backlog. Adjusted for our estimated cash backlog, we calculate a steel value of USD400m/rig, corresponding to long-term dayrates of around USD450k from 2023–2024 onwards, roughly double the current level. We have raised our target price to NOK42.5 (NOK25) to reflect the pro...