Gulf Marine Services termed Seafox’s proposal as “wholly opportunistic” and one that has come at a time of significant macro uncertainty due to the prevailing Covid-19 outbreak

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Gulf Marine Services turns down Seafox's proposal. (Credit: aymane jdidi from Pixabay)

Gulf Marine Services (GMS) has rejected a $32m buyout offer from Dutch offshore jack-up company Seafox International citing that it fundamentally undervalues the company.

The UAE-based oilfield industry contractor has been issued an offer of $0.09 per share by the Dutch firm.

The company termed Seafox’s proposal as “wholly opportunistic” and one that has come at a time of significant macro uncertainty due to the prevailing Covid-19 outbreak.

Gulf Marine Services said that the pandemic has led to depressed share prices globally, especially in the energy industry, and has led to its shares trading at all-time lows recently.

The oilfield industry contractor said that its board found that the Seafox’s proposal did not reflect the significant operational and financial progress made by it during the last 12 months and also the company’s materially improved long-term prospects.

Gulf Marine Services executive chairman Tim Summers said: “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.”

How Gulf Marine Services and Seafox serve the energy industry

Listed on the London Stock Exchange, Gulf Marine Services provides advanced self-propelled self-elevating support vessels (SESVs) to the oil, gas and renewable energy sectors.

The company’s fleet of 13 SESVs are engaged in various offshore oil and gas platform refurbishment and maintenance activities, well intervention work, offshore wind turbine installation and maintenance work, ad offshore oil and gas platform installation, and decommissioning.

Seafox, on the other hand, owns 11 self-elevating jack-up units, which support the oil and gas and renewable industry.

The Dutch offshore jack-up company stated: “Without Seafox’s support – both for its pro rata portion or for additional shares – the chances of GMS achieving a substantial equity raise is highly uncertain.

“It is Seafox’s view that any capital raise would, at best, be highly dilutive to existing shareholders. Should GMS be unable to secure sufficient equity investment and if the warrants are issued and/or PIK interest is incurred, this will severely depress returns for GMS’ shareholders.”