History
Sonat Offshore Drilling bought Norway's Transocean ASA in 1996, renamed itself Transocean Offshore, and by 1998 profits had soared before it moved to the Cayman Islands.
1996-1997: Buying Transocean ASA
In April 1996 Sonat Offshore Drilling Inc. made an unsolicited proposal for Norway's Transocean ASA. By May 2 it had an agreement in principle, and on May 10 it announced that Transocean had chosen it over a rival bidder. On May 20 it revised its offer, and Tiger Management Corp, which owned about 17.2% of Transocean, agreed to tender its shares. In July the company registered up to 28,652,037 shares to be exchanged for 54,060,448 Transocean ASA shares.
The exchange offer closed on September 3, 1996. Sonat Offshore acquired about 94% of Transocean ASA for 22,920,840 of its own shares plus $207.4 million in cash. It then renamed itself Transocean Offshore Inc. and raised its authorized share count to 150,000,000. Norwegian law required a follow-on cash offer for the remaining public shares. Through November and December 1996 the company kept buying, spending about $91 million in cash and lifting its stake to over 99%.
For 1996 net income was $78.0 million ($1.07 a share diluted, as later restated), up from $46.9 million in 1995. The company credited high rig utilization, meaning how fully its drilling rigs were kept working, and four months of Transocean ASA results.
1998-1999: Peak of the upcycle
The following year was far stronger. In 1997 revenue nearly doubled to $892 million from $529 million, and net income rose to $141.9 million ($1.38 a share). The offshore drilling market had strengthened, and a full year of Transocean ASA was included.
The record for 1998 was stronger still. Revenue reached $1,090 million and net income $343 million ($3.41 a share diluted), more than double 1997. This marked the peak of the 1990s offshore drilling upcycle.
On March 15, 1999, the board approved moving the company from a Delaware corporation to a Cayman Islands corporation. Chairman and CEO J. Michael Talbert cited the company's growing international business. Operations were to continue unchanged under the new parent. At the date of its latest report, March 19, 1999, the company stood as a larger, more profitable drilling group than three years earlier, with the reorganization announced.
Written from the 8 story beats below (1996 to 19 Mar 1999), which come from the company's own announcements and filings.