Rolls-Royce announces £154M recommended offer for ODIM ASA

Rolls-Royce, the global power systems company, today announced that it has reached an agreement with the Board of ODIM ASA to launch a recommended cash offer for the 67 per cent of the share capital not already held by the Group.

Under the terms of the agreement, Rolls-Royce (the “offeror”) will offer ODIM ASA shareholders NOK 45 per share, representing a total consideration of approximately NOK 1.4bn (circa £154m), to be settled in cash from the Group’s existing resources. Rolls-Royce currently holds 15,545,634 ODIM ASA shares, comprising 33 per cent of the issued share capital acquired for NOK 45 per share in July 2009.

Listed on the Oslo Stock Exchange, ODIM ASA is a Norwegian marine technology company which develops and sells advanced automated handling systems for seismic and offshore vessels. Rolls-Royce has complementary capabilities in integrated ship systems for the offshore industry, including ship design and the design and integration of power and propulsion systems.

ODIM ASA’s Board of Directors has unanimously recommended that its shareholders accept the offer. In addition, the Board of Directors and members of management holding shares have undertaken to accept the offer.

John Paterson, President of Rolls-Royce Marine said: “This is an attractive proposition. ODIM ASA is rich in technology with a unique subsea and deepwater capability that complements our own activities. Integrating ODIM ASA’s innovative technology and highly skilled people into our business will enable us to optimise our offering and provide our global customer base with a wider range of products and services in this important market segment.”

Njål Sævik, Chairman of ODIM ASA, stated: “Our Board has examined all strategic options to maximise shareholder value and considers Rolls-Royce an attractive owner. We have undertaken a careful review of the terms and conditions of the offer and are unanimous in recommending that our shareholders accept the offer.”

Arild Hatløy, CFO and acting CEO of ODIM ASA said: “We see great potential for ODIM ASA in becoming part of a truly global business. We believe that Rolls-Royce’s ownership will help us to optimise our business, enabling us to better serve our customers, as well as expanding opportunities for our employees.”

Further information on the offer:
The offer will be made by Rolls-Royce Marine AS, a wholly-owned subsidiary of Rolls-Royce Group plc.

The complete details of the offer, including all terms and conditions, will be contained in an offer document to be sent to ODIM ASA shareholders following review and approval by the Oslo Stock Exchange pursuant to Chapter 6 of the Norwegian Securities Trading Act. The offer document is expected to be sent to ODIM ASA shareholders on or around 1st March 2010 and the offer period is expected to be 20 business days.

As further detailed and specified in the offer document, the offer will be subject to the following conditions being satisfied or waived:

a. the offeror receiving valid acceptances of the offer in respect of a number of ODIM ASA shares which, together with shares already held by the offeror, exceeds 90 per cent of the total number of shares and votes in ODIM ASA on a fully diluted basis;
b. ODIM ASA’s Board not having amended or withdrawn its recommendation of the offer, except with the consent of the offeror;
c. receipt of all necessary permits and approvals from governmental and regulatory authorities for the completion of the offer;
d. no court or other authority having taken any legal action that restrains or prohibits the consummation of the offer or imposes conditions which are not acceptable to the offeror;
e. there having been no changes to the issued share capital of ODIM ASA;
f. ODIM ASA having conducted its business in the ordinary course and in accordance with applicable laws and regulations.

If as a result of the offer, the offeror acquires and holds more than 90 per cent of the total number of shares and votes in ODIM ASA on a fully diluted basis, the offeror intends to carry out a compulsory acquisition of the remaining shares in ODIM ASA, and then intends to file an application with the Oslo Stock Exchange to de-list the shares of ODIM ASA.

NM Rothschild & Sons Limited is acting as sole financial adviser to Rolls-Royce, and Wiersholm, Mellbye & Bech, advokatfirma AS and Freshfields Bruckhaus Deringer LLP are acting as legal advisers.

The offer and any acceptances thereof shall be governed by and construed in accordance with the laws of Norway. The courts of Norway shall have exclusive jurisdiction over any dispute arising out of or in connection with the offer.

Disclosure of ownership of and rights to shares

Rolls-Royce currently holds 15,545,634 ODIM ASA shares, comprising 33 per cent of the issued share capital and voting rights of ODIM ASA. In addition, shareholders holding a total of 633,800 shares, corresponding to 1.35 per cent of the issued share capital and voting rights of ODIM ASA, undertook to accept the offer after close of trading on 25 February 2010, causing ODIM ASA to exceed the disclosure threshold of 1/3 of the share capital and voting rights of ODIM ASA.

1. Rolls-Royce, a world leading provider of power systems and services for use on land, at sea and in the air, has established a strong position in global markets – civil aerospace, defence aerospace, marine and energy.
2. Rolls-Royce employs over 38,000 skilled people in offices, manufacturing and service facilities in 50 countries. The Group has a strong commitment to apprentice and graduate recruitment, and to further developing employee skills.
3. In 2009, Rolls-Royce invested £864m on research and development, two thirds of which had the objective of further improving the environmental aspects of its products, in particular the reduction of emissions.
4. Annual underlying revenues were £10.1bn in 2009, of which about half came from services revenues. The firm and announced order book stood at £58.3bn at 31 December 2009, providing visibility of future levels of activity.
5. The Marine business of Rolls-Royce employs 8,000 people in 34 countries with the main manufacturing centres being in the UK, the Nordic countries, the United States and increasingly Asia.
6. Rolls-Royce is a world leader in marine solutions, providing products, service and expertise to more than 30,000 vessels in the offshore, merchant, naval surface and submarine markets. It designs ships and its product range includes propulsion systems featuring diesel engines and gas turbines, propellers, thrusters and water jets. Rolls-Royce also provides manoeuvring and stabilising systems and deck machinery.
7. ODIM ASA is a global technology group that engineers and produces advanced and complete automated handling solutions in the offshore oil & gas, naval and power generation markets.
8. ODIM ASA is headquartered in Hareid, Norway, with operations in six countries, including Norway, Canada, Singapore and Vietnam and employs approximately 900 people worldwide.
9. ODIM ASA’s annual revenues were NOK 1,996m (circa £217m) in 2009, of which 95 per cent represents marine applications, generating profit before tax of NOK 126m (circa £14m).
10. ODIM ASA has over 35 years of experience within the seismic and offshore supply market. ODIM ASA also has a solid position in specialist areas of the defence and nuclear markets. The Subsea and Deepwater Installation division also develops and sells products aimed at customers in the well intervention and drilling end-markets. ODIM ASA is making a significant commitment to the very promising deep water sector, in which it has established a unique position with its ODIM ASA Cable Traction Control Unit (CTCU) technology.


Important notices

This release is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This release has been prepared by Rolls-Royce. No representation or warranty (express or implied) of any nature is given, nor is any responsibility or liability of any kind accepted, with respect to the truthfulness, completeness or accuracy of any information, projection, statement or omission in this presentation. This release does not constitute, nor does it form part of, any offer or invitation to buy, sell, exchange or otherwise dispose of, or issue, or any solicitation of any offer to sell or issue, exchange or otherwise dispose of, buy or subscribe for, any securities, nor does it constitute investment, legal, tax, accountancy or other advice or a recommendation with respect to such securities, nor does it constitute the solicitation of any vote or approval in any jurisdiction, nor shall there be any offer or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the applicable securities laws of any such jurisdiction (or under exemption from such requirements). The offer will be made solely by means of the offer document and the acceptance forms accompanying the offer document, which will contain the full terms and conditions of the offer including details of how it may be accepted.

The offer is not being made in or into, and is not capable of acceptance in or from, Japan. Custodians, nominees and trustees should observe these restrictions and should not send or distribute documents in or into Japan.
Notice to US holders of ODIM ASA shares

The offer is being made for the securities of a Norwegian company and is subject to Norwegian disclosure requirements, which are different from those of the United States. The financial information included in this document has been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. The offer will be made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of the Norwegian Securities Trading Act. Accordingly, the offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the offer by a US holder of ODIM ASA shares may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of ODIM ASA shares is urged to consult his independent professional advisor immediately regarding the tax consequences of acceptance of the offer.

It may be difficult for US holders of ODIM ASA shares to enforce their rights and claims arising out of the US federal securities laws, since Rolls-Royce and ODIM ASA are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US holders of ODIM ASA shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgement.

In accordance with normal Norwegian practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Rolls-Royce or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, ODIM ASA shares outside of the United States, other than pursuant to the offer, before or during the period in which the offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Information about such purchases will be disclosed to the extent required by Norwegian law. Any disclosures pursuant to Norwegian legal requirements will be reported to Oslo Børs and distributed through its electronic information system and will be available on the Oslo Børs website, www.oslobors.no/ob_eng/.
Forward-looking statements

Certain statements in this announcement constitute forward-looking statements. The forward-looking statements contained herein include statements about the expected effects of the offer, the expected timing and scope of the offer and other statements other than in relation to historical facts. Forward-looking statements include, without limitation, statements typically containing words such as “intends”, “expects”, “anticipates”, “targets”, “estimates”, “believes”, “should”, “plans”, “will”, “expects” and similar expressions or statements that are not historical facts are intended to identify those expressions or statements as forward-looking statements. These statements are based on the current expectations of Rolls-Royce and are naturally subject to uncertainty and changes in circumstances. By their nature, forward-looking statements involve risk and uncertainty and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction or waiver of the conditions to the offer, economic and market conditions in the geographic areas and industries that are or will be major markets for Rolls-Royce’s or ODIM ASA’s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements. Neither Rolls-Royce nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Other than in accordance with their legal or regulatory obligations (including under the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Services Authority and the Norwegian Securities Trading Act), Rolls-Royce is not under any obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.