Offshore vessel provider Gulf Marine Services (GMS) has rejected a Seafox takeover bid, claiming it has strengthened its board and secured new business despite making an adjusted $20m loss last year.
GMS also said that it had reduced its cost base, delivering $13m savings in 2019 up from a $6m target, and refocused the company in a filing to the London Stock Exchange this morning rejecting Seafox’s “unsolicited” offer.
Jack-up provider Seafox responded to the board’s rejection by asking shareholders to support its proposal and emphasised the impact of oil demand reduction that it said would likely lead to delays and cancellation of contract awards.
It added that it believed “GMS’ secured backlog of $240m as at 31 March 2020 may face some deterioration, especially in the short and medium term, as a result of client requests for discounts and possible early termination”.
“This would obviously have a negative impact on GMS’ 2020 and 2021 EBITDA, which Seafox believes is the reason for GMS’ lack of published guidance,” Seafox said.
The company said that it made a non-binding offer because it believed this could achieve value through synergies and cost savings.
Seafox added that it believed the current GMS fleet could be replicated at a lower cost than the firm’s current enterprise value.
GMS said the Seafox proposal had undervalued the company’s equity at only $32m.
GMS executive chairman 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.”