4th May 2020 10:11
(Alliance News) - Gulf Marine Services PLC on Monday said it has rejected a USD32 million acquisition proposal from Seafox International Ltd, which it labelled as "wholly opportunistic" amid the uncertainty in equity and commodity markets due to the Covid-19 pandemic.
Gulf Marine back on Thursday had said it was reviewing an approach from Seafox, which provides services to the offshore industry.
Seafox is already a 13.7% shareholder in Gulf Marine, the second largest after Aberforth Partners LLP, according to Morningstar.
"The Seafox proposal is wholly opportunistic," Gulf Marine said.
"The Seafox proposal comes at a time of significant macro uncertainty caused by Covid-19. This has resulted in depressed share prices globally, particularly in the energy sector, and it has, the board believes, resulted in the company's shares trading at all-time lows recently. Seafox voluntarily chose to announce the Seafox proposal the day before GMS updated the market on its 2019 results and on the significant recent progress within the business
"The Seafox proposal has been made just a short time before the planned conclusion of the documentation of our amended bank facilities."
On top of this, Gulf Marine said the USD32 million offer "fundamentally undervalues" the company.
Gulf Marine was trading 7.3% lower at 4.98 pence per share on Monday morning, giving it a market capitalisation of roughly GBP17.5 million.
Executive Chair Tim Summers said: "Operationally and commercially, GMS is in much better shape today than it was 12 months' ago. The company is performing well notwithstanding the difficult environment; we have reduced costs and we will continue to reduce them further in 2020. We have agreed in principle a deal with our banks that provides the company with long-term financial stability.
"The board remains highly confident in the future success of the company. Now is not the time for shareholders to sell at a price that is far below the true worth of GMS."
Seafox said on Monday that the due to Covid-19 battering demand, the oil industry requires a "structural adjustment".
The company added: "Seafox is keen to support GMS strategically rather than solely financially. However, in the event that an offer is made on the same terms as the proposal or otherwise and such offer is unsuccessful, then Seafox would not be supportive of any future equity raise by GMS."
By Eric Cunha; [email protected]
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