TGS Makes Surprise $600 Mln Offer for Part of Rival PGS
Seismic surveyor TGS, a supplier of geological data to the global oil industry, on Thursday said it had made an unsolicited cash offer of $600 million for a key part of rival PGS.
If successful, the offer to buy PGS's so-called multi-client library would significantly broaden TGS's worldwide geophysical data offering, the company said.
PGS did not immediately respond to a request for comment from Reuters.
In addition to spending cash from its current holding, TGS said it will borrow $200 million and also conduct an equity issue to pay for the transaction.
While TGS' strategy has been one of renting the oceangoing vessels needed for the process of acquiring seismic data, PGS has had an integrated approach of owning its own ships - leaving the company more exposed at a time of weak oil prices.
The proposal, if accepted, would give PGS the necessary cash to repay a $135 million revolving credit facility due in September, TGS said in its statement.
In addition, TGS would commit to renting vessels from PGS for future data collection, it said.
"We see a strong complement between our existing business and the PGS data library and the opportunity to leverage our expertise and scale to improve returns," TGS Chief Executive Kristian Johansen said.
"Concurrently, a refocused and refinanced PGS will be a world-leading and highly innovative provider of acquisition technology and marine acquisition capacity," he added.
PGS last month said it was reducing capital spending to a minimum and seeking to preserve liquidity while at the same time talking to creditors to seek an extension to the September repayment deadline and amend debt covenants.
(Reporting by Terje Solsvik; Editing by Leslie Adler and Dan Grebler)