Shares of Transocean Ltd. tumbled 6.3% in active midday trade Tuesday, after the oil services company announced a stock an agreement valued at $3.4 billion, including debt, to buy Norway's Songa Offshore in a stock and convertible debt deal. Volume reached 25.4 million shares, already well above the full-day average of 16.2 million shares. The stock hit an all-time intraday low of $7.55 earlier in the session before paring some losses. Under terms of the deal, Songa Offshore shareholders will receive consideration comprised of 50% newly issued Transocean common shares and 50% in bonds convertible into common shares. RBC Capital analyst Kurt Hallead expects Transocean to issue 128.2 million shares, including convertibles, to raise the total share count, or dilute current shareholders, by 32% to 524.7 million shares. Songa shares rocketed 29% to a 17-month high. Transocean's stock has plunged 47% year to date, while the VanEck Vectors Oil Services ETF has shed 33% and the S&P 500 has gained 10%.
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