SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 7, 1996
READING & BATES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5587 73-0642271
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
901 Threadneedle, Suite 200, Houston, TX 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 496-5000
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Press Release dated May 7, 1996 - Announcing
submission of letter to Transocean ASA revising
terms of proposal for combination of Reading &
Bates and Transocean.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
READING & BATES CORPORATION
By /s/T. W. Nagle
------------------------
T. W. Nagle
Executive Vice President,
Finance and Administration
Dated: May 7, 1996
EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Mr. Charles R. Ofner
(713) 496-5000
May 7, 1996, Houston, Texas.....Reading & Bates Corporation (RB-
NYSE) announced today that it has submitted a letter to the members of the
board of directors of Transocean ASA setting out revised terms of its
previously announced proposal regarding a business combination between
Transocean and Reading & Bates. Under the revised terms, each of
Transocean's stockholders would be entitled to receive 1.28, instead of
1.245, shares of Reading & Bates common stock for each share of Transocean
common stock. The text of the letter is attached to this press release.
Paul B. Loyd, Jr., the Company's Chairman, President and CEO said, "We
believe the revised terms of our previously announced proposal are
demonstrably better than the competing terms and represent a transaction
that would clearly be in the best interests of Transocean's shareholders,
employees and customers."
Reading & Bates is a New York Stock Exchange listed company,
providing offshore drilling services throughout the world. Its wholly
owned subsidiary, Reading & Bates Development Co., provides technical,
construction and project management services and floating production
systems to the upstream offshore oil and gas industry worldwide.
QUOTE
May 7, 1996
VIA TELEFAX 011-47-51-69-69-89
Members of the Board of Directors
Transocean ASA
Plattformveien 2-4
P.O. Box: 65
4056 Tananger
Norway
Gentlemen:
Reference is made to the prior discussions between the senior
representatives of Transocean ASA and Reading & Bates Corporation with
respect to a possible business combination between the two companies. As
you know, we have had extensive meetings with your senior management and
certain designated board members in this regard.
We continue to believe that Reading & Bates and Transocean represent an
ideal industrial combination, and one that is far better than the
available alternatives. In particular, the two combined companies would
field a North Sea fleet of 14 semis, five of which would be fourth
generation rigs. This combination of assets in the North Sea would give
the combined companies the ability to provide the maximum service
potential to the major oil company clients of both companies. As you
know, the harsh environment of the North Sea is the appropriate operating
arena for both companies' high quality rigs because, unlike the Gulf of
Mexico or West Africa, lower specification units cannot be readily
upgraded for the North Sea's harsh environment.
It is also important to note that the combined North Sea operations offer
significantly improved employment and promotional opportunities for the
employees of both companies. The JACK BATES will commence operations in
the North Sea in early 1997 and RIG 42 will commence operations shortly.
In addition, as announced in our press release of May 6, 1996 (a copy of
which is attached) Reading & Bates expects to commence managing the HENRY
GOODRICH later this year under a long term contract from BP. These
developments should result in a net gain in employment resulting from the
combination of the two companies, rather than the more normal reductions
in force. Besides the crucial importance of the combined North Sea
operations, both companies' organizations in general are a natural
professional and technical strategic fit. Further, the combined company
would consist of a fleet which would make it the most important high
specification semi provider in the world and in particular the North Sea
market.
We were disappointed to see the results of our recent discussions
culminate with Transocean's announcement of a letter of intent for a
combination with Sonat Offshore. We believe that this result is
inconsistent with what we understood to be the objective of Transocean,
namely to obtain the best available transaction for Transocean's
stockholders, employees and customers. We feel our proposal, discussed
with your representatives in London on Wednesday May 1, 1996, represented
better economic value to Transocean's shareholders, creates improved
employment opportunities for Transocean's work forces and results in an
improved strategic fit which would substantially benefit Transocean's
customers. Nevertheless, we are prepared to improve the terms of our
prior proposal, and accordingly we submit for your consideration revised
terms of a combination of our two companies. The revised terms have been
approved by Reading & Bates' board of directors and are set out below:
Reading & Bates will organize a new Delaware holding company
("Holdingco"). Each outstanding share of Reading & Bates
common stock will be converted into one share of Holdingco
common stock. Holdingco will offer 1.28 shares of Holdingco
common stock for each share of Transocean stock through an
exchange offer. These terms are subject to the tender of at
least 90% of Transocean's shares which are not withdrawn prior
to acceptance, to the approval of Reading & Bates'
stockholders and other customary conditions.
Further, Reading & Bates remains willing to discuss additional
terms in the context of the negotiation of a definitive
agreement between our respective companies with respect to
such a combination.
We believe the revised terms are demonstrably in the best interests of
Transocean's stockholders. In addition to offering tax advantages to your
stockholders, a stock for stock exchange is the most efficient method of
ensuring that your stockholders receive the maximum value created by a
combination of our two companies.
During discussions between our respective companies, Transocean's senior
management mentioned the three constituencies that needed to be addressed
by any combination that Transocean might undertake: shareholders,
employees, and customers. We feel our proposal achieves highest value for
each because, respectively, it: 1) provides higher economic value; 2)
provides for greater employment opportunities; 3) creates the most capable
high specification semi company in the industry.
We trust that, consistent with your obligations to Transocean's
stockholders, you will not take any actions, such as a lock-up or break-up
fee, that would impede Reading & Bates' ability to submit our proposal to
Transocean's stockholders so they may give it due consideration.
In accordance with disclosure requirements in the U. S. A., we are issuing
a press release setting forth the material terms and conditions of this
letter.
We ask you carefully to review and consider the revised terms set out
above. We would prefer to proceed on the basis of a transaction that is
recommended by Transocean's board of directors to its stockholders.
However, in any event we intend to proceed with our proposal.
Thank you for your past and future cooperation. We look forward to
working with you to achieve a combination of Transocean and Reading &
Bates for the mutual benefit of both of our shareholder groups.
Very truly yours,
Paul B. Loyd, Jr.
Chairman and Chief
Executive Officer
PBL:hi
Distribution:
Board of Directors:
Kristian Siem
Geir Aune
Einar Kloster
Fridtjof Lorentzen
Jan-Aksel Torgersen
Employee Representatives:
John M. Fjose
Jostein Rasmussen
Per Inge Grimsmo
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