Subsea 7 shares rise after takeover link

Baker Hughes has reportedly held talks with the London-based offshore engineering, construction and services Subsea 7 about a possible takeover.

Insiders told Wall Street Journal that talks between the General Electric-owned company and Subsea 7 broke down over price but they could be revived.

The share price of Subsea 7, which was valued at US$5.4 billion, fell after it was downgraded by Goldman Sachs to a “sell” rating in its latest research report.

A day later, on Wednesday, the Oslo Stock Exchange suspended the listing of Subsea 7 to investigate movements in the share price after it rose on the alleged takeover news.

Subsea 7 issued a public statement saying it is, “aware of today’s press speculation and subsequent share price movement”, but also added it has a “policy not to comment on speculation or rumours”.

Trade suspension on Oslo Exchange was lifted after Subsea 7’s response.

Subsea 7 Chairman Kristian Siem, who owns 21.3 per cent of shares, said the firm would always comply with its duty to inform the market if there were material changes.  

The company posted a second-quarter 2017 profit of $146 million, or $0.43 per share, on revenue of $1 billion.

A year earlier it posted a $136 million profit, or $0.40 per diluted share on revenue of $960 million.