History
TODCO, a drilling contractor freed from Transocean's control in 2004, paid a special dividend, set up a $200 million credit line, then agreed in 2007 to be sold to Hercules Offshore.
2004-2005: Independence from Transocean
TODCO, a Houston drilling contractor, had its securities certified for listing on the New York Stock Exchange on 3 February 2004, clearing them to begin trading. At that point Transocean was its majority owner.
That changed in December 2004. Transocean sold 13,000,000 TODCO Class A shares at $18.00 each, and the underwriters took up their option for 1,950,000 more. TODCO received no proceeds, because the shares were Transocean's to sell. Transocean converted its Class B shares into Class A and was left with 13,310,000 shares, about 22%. Its voting power fell from about 81.5% to about 22%, which ended its majority control, though it kept rights to nominate directors in proportion to its ownership and to consent to certain charter and bylaw changes.
In August 2005 the board reversed its stated policy of paying no dividends and declared a special cash dividend of $1.00 per share, payable to holders on record at 15 August 2005. To offset the effect on holders of options and deferred stock units, it paid a special bonus of $0.70 per share on those awards.
2005-2007: Borrowing capacity and a sale
On 29 December 2005 TODCO signed a four-year, $200 million secured revolving credit facility with Nordea Bank Finland and other lenders. It was secured by most of its drilling rigs, receivables and the stock of most U.S. subsidiaries. Borrowing was capped at the lesser of $200 million or one third of the rigs' fair market value, and covenants included a minimum tangible net worth of $375 million. The filings do not say how much was drawn. The record for 2006 is otherwise quiet.
In March 2007 TODCO agreed to be acquired by Hercules Offshore. Holders could elect cash or Hercules stock, with value equal to 0.979 Hercules shares plus $16 in cash per TODCO share. TODCO amended its credit agreement and its rights agreement so the deal would not trigger a default or treat Hercules as an acquirer. A $70 million break fee could be owed by TODCO and $30 million by Hercules in certain terminations.
The definitive proxy was filed on 1 June 2007, citing about $924.4 million in cash and about 56.6 million Hercules shares, with the board recommending approval. Both companies' stockholders were to meet on 11 July 2007. On 11 July TODCO terminated the registration of a class of its securities, and on 12 July its exchange filed to remove a class from listing, the last steps in the record.
Written from the 8 story beats below (2004 to 12 July 2007), which come from the company's own announcements and filings.