UPDATE 1-Pride, Seahawk rise as they mull selling themselves

* Seahawk blames drilling permit delays

* Pride approached by rivals – report * Seahawk could be
taken private — analyst

* Seahawk up 8 pct, Pride up 6 pct

By Thyagaraju Adinarayan & Arup Roychoudhury

BANGALORE, Nov 3 (BestGrowthStock) – Shares of Pride International
(PDE.N: ) and its spin-off, Seahawk Drilling Inc (HAWK.O: ), rose
on Wednesday, a day after reports said the offshore drillers
were mulling alternatives, including selling themselves.

Shallow water driller Seahawk, which the market values at
$120 million, said drilling permit delays were hurting its
revenue and liquidity forcing it to mull recapitalization,
selling assets, or even itself. [ID:nSGE6A10MQ]

Deepwater driller Pride International was also considering
putting itself up for sale after recent merger interest from
rivals, the Wall Street Journal reported on Tuesday.

Spokespersons for Noble, and Pride, which has long been
considered a takeover target, declined to comment.

The offshore oil drilling sector has long been seen as ripe
for consolidation. While the conditions created by the oil
spill should accelerate deals, it has become tougher for
smaller drillers to compete. [ID:nN30218160]

Pride is evaluating strategic options that could include a
possible sale of the company after recent merger interest from
rivals, including Norway’s Seadrill (SDRL.OL: ) and Ensco Plc
(ESV.N: ), the report said, citing people familiar with the
matter.

Ensco could not immediately be reached for comment.

In recent months, Noble Corp (NE.N: ) has also looked at and
then walked away from Pride, which has a market capitalization
of $5.45 billion, the paper said.

Seadrill, which has a close to 10 percent stake in both
Pride and Seahawk, is viewed as a potential acquirer,
especially since it has said that it is on the prowl this year.
[ID:nN1694533]

GOING PRIVATE?

Seahawk, whose market share in the U.S. Gulf jack-up market
is second only to Hercules Offshore (HERO.O: ), said in a
statement that the heightened regulatory scrutiny following the
oil spill in the U.S. Gulf was hurting its business.

“To me it almost seems like (Seahawk) will be a ‘taken
private’ story,” Global Hunter Securities analyst Matthew Beeby
told Reuters.

He added that Seahawk could command a premium of nearly 50
percent given its assets — 20 jack-up rigs in the U.S. Gulf —
and a balance sheet free of any long-term debt.

“When it comes down to Seahawk, its an execution story.
They had to really diversify out of the U.S. to international
markets through their potential acquisitions.”

While Seahawk stayed rooted in the U.S. Gulf and ended up
with idle rigs as business conditions deteriorated, companies
like Rowan Cos (RDC.N: ) moved their rigs to international
waters.

Shares of Seahawk, which have nearly halved in value since
the oil spill in April, were up 2 percent at $10.29 in morning
trade on Nasdaq. They had earlier spiked as much as 20 percent
in trading before the market opened.

Pride’s shares rose as much as 6 percent in early trade,
before paring some gains to trade up 3 percent at $31.98 in
afternoon trade on the New York Stock Exchange. Its shares are
down about a tenth since the oil spill.
(Reporting by Thyagaraju Adinarayan in Bangalore; Editing by
Savio D’Souza)

UPDATE 1-Pride, Seahawk rise as they mull selling themselves