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: July 11, 1997
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 (281) 496-5000
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Press Release dated July 10, 1997 - Reading & Bates
Corporation and Falcon Drilling Company announce they
have agreed to combine their companies into a new
company - R&B Falcon Corporation.
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
(Principal Financial and
Accounting Officer)
Dated: July 11, 1997
EXHIBIT 99
Contacts:
Robert F. Fulton Charles R. Ofner
Falcon Drilling Company Reading & Bates Corporation
(713) 623-8984 (281) 496-5000
FALCON DRILLING AND READING & BATES ANNOUNCE
$5 MILLION STRATEGIC COMBINATION OF EQUALS
-- Combined Company To Operate World's Largest
Offshore Drilling Fleet --
-- Leading Position in High-Margin
Deepwater Drilling Rigs --
HOUSTON, TEXAS, July 10, 1997 -- Falcon Drilling Company Inc. (NYSE: FLC)
and Reading & Bates Corporation (NYSE: RB) announced today that they have
agreed to combine their companies into a new company -- R&B Falcon
Corporation -- which will operate the world's largest offshore drilling
fleet.
Under the terms of the definitive agreement, which has been unanimously
approved by the Boards of Directors of both companies, Falcon Drilling
shareholders will receive 1 share of R&B Falcon Corporation common stock
for each share of Falcon Drilling common stock. Reading & Bates
shareholders will receive 0.59 shares of R&B Falcon Corporation common
stock (which exchange ratio will be adjusted to 1.18 to give effect to the
previously announced Falcon Drilling stock-split) for each share of
Reading & Bates common stock. The exchange of shares for both companies
is expected to be tax-free, and the companies will seek pooling of
interests accounting treatment. The transaction, which is subject to
regulatory and shareholder approvals, is expected to close in the fourth
quarter of 1997.
R&B Falcon Corporation will be an offshore drilling leader, particularly
with respect to fast growing deepwater and transition zone drilling.
Specifically, the new company will have a fleet of fourteen vessels
(including those under construction) capable of drilling in greater than
3,000 feet of water, including eight DP drillships, giving it the
industry's largest deepwater fleet; one of the largest jack-up fleets in
the industry with 25 rigs; and a preeminent position in worldwide
transition zone drilling.
Paul B. Loyd, Jr., Chairman, Chief Executive Officer and President of
Reading & Bates, will be Chairman of the new company. Steven A. Webster,
Chairman and Chief Executive Officer of Falcon Drilling, will be President
and Chief Executive Officer. The new company's Board of Directors will
consist of 10 directors, with five each being appointed by Falcon Drilling
and Reading & Bates, respectively.
Steve Webster said, "This combination represents a very significant
consolidation opportunity in the fast growing highest margin segment of
the drilling industry-deepwater. Our combined rig fleets and technical
expertise will be second to none. This is consistent with the successful
strategy we have both employed to build leadership positions in other
segments of the contract drilling business. R&B Falcon will maintain its
focus on that path. Any non-core investments will be carefully examined
to ensure that we maximize shareholder value."
"We are very excited about this transaction," said Purnedu Chatterjee,
director of Falcon and representative of S-C Rig Co., Falcon's largest
shareholder. "Falcon management's strategy of acquiring and consolidating<PAGE>
assets in growth markets has built substantial shareholder value. This
merger represents yet another major step in successfully executing a well
proven strategy."
Paul Loyd stated, "This transaction creates a powerhouse in terms of
competitive edge, market expertise, access to equipment and ability to
build value for shareholders. Our combined company will have the market
share, financial resources and, above all, the people we need to take
advantage of the numerous opportunities before us.
"I fully expect to see the benefits of this transaction almost
immediately. We share a common culture of lean operation, well-considered
-- and successful -- risk taking, and a singular commitment to creating
shareholder value. Given that Steve and I have known each other and
worked together for over 25 years and that we do not expect any
significant layoffs at the operating level, I am confident of our ability
to achieve a seamless and rapid integration of our operations."
Falcon Drilling Company is a NYSE listed company, providing offshore
drilling services for the international oil and gas industry. Falcon's
fleet of 82 drilling units services the international deepwater, the
offshore Gulf of Mexico and the worldwide transition zone.
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., engages in the business of
acquiring interests in offshore oil and gas properties and thereby
participates in reservoir risk sharing. Through its TOPS joint venture, a
full range of field development contracting alternatives is offered to oil
and gas companies, including such services as drilling, marine and subsea
construction and production services.
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