Norway competition authorities reject Keppel associate's bid to form offshore housing giant

NORWAY competition authorities have rejected the application for Keppel Corp's associate company Floatel International to merge with Oslo-listed Prosafe to create the world's largest offshore accommodation company.

FELS Offshore, a unit of Keppel's Offshore & Marine arm, owns a 49.92 per cent stake in Floatel.

In an exchange filing on Wednesday, Keppel said that Floatel and Prosafe are assessing whether to appeal against the decision.

It added that the transaction is not expected to have a material impact on the net tangible assets or earnings per share of the group for the current financial year.

Under the proposed deal, Prosafe was to acquire all of Floatel's outstanding shares and warrants in exchange for new Prosafe shares that will give Floatel's shareholders a 45 per cent stake in the merged entity.

FELS Offshore's resultant shareholding in the post-merger Prosafe will be about 22 per cent.

The merger would have combined Prosafe's existing nine semi-submersible vessels, and options for two newbuild semi-submersible vessels with Floatel's five semi-submersible vessels, Prosafe said in an announcement at the time.

The transaction was subjected to the fulfillment of certain conditions - including clearances from competition authorities in Norway and the United Kingdom, along with creditor and shareholder approvals of both Floatel and Prosafe respectively. Prosafe was also to continue its listing on the Oslo Stock Exchange.

Keppel Corp shares closed at S$6.86 on Tuesday, down five Singapore cents or 0.7 per cent.