Prosafe SE

Regulatory Filings • Jun 21, 2010

BW Offshore announces a Voluntary Exchange Offer to acquire all Shares of Prosafe Production not currently owned by BWO

NOT FOR PUBLIC DISTRIBUTION, DIRECTLY OR INDIRECTLY,

IN OR INTO THE UNITED STATES OF AMERICA, CANADA,

AUSTRALIA OR JAPAN

21 June 2010 - BW Offshore Limited ("BWO" or "BW

Offshore"), one of the world's leading FPSO

contractors and a market leader within advanced

offshore loading and production systems to the oil

and gas industry, announced today its intention to

make a voluntary exchange offer (the "Offer") for all

of the shares of Prosafe Production Public Limited

("Prosafe Production") not currently owned by BWO.

The consideration offered will be 1.2 BWO shares and

NOK 5.25 in cash per Prosafe Production share. This

consideration corresponds to NOK 16.21 per Prosafe

Production share, based on the closing share price of

BWO on 18 June 2010 of NOK 9.13, and values the total

share capital of Prosafe Production at approximately

NOK 4.1 billion. This represents a premium of 17.0%

to the closing share price of Prosafe Production on

18 June 2010, the last trading day prior to the

announcement of the Offer and a premium of 20.1% to

the one month volume weighted average share price of

Prosafe Production for the period ending on 18 June

2010. The Offer further represents a premium of 39.6%

to the one month volume weighted average share price

of Prosafe Production for the period ending on 19

March 2010, one trading day prior to Prosafe

Production's announcement of the Letter of Intent for

the sale of its turret and swivel business

(the "Turret Business").

Carl Arnet, CEO of BWO, comments "The FPSO sector is

in need of larger companies that can meet the

increasing requirements from clients and regulators

in terms of technical competence, scope and

investments per unit. BWO is of the opinion that a

combination with Prosafe Production will create an

FPSO company with the diversification, presence,

financial scale and competence to meet such increased

requirements going forward. Through the Offer,

Prosafe Production shareholders will have the

opportunity to participate in developing an industry

leader and we believe the Offer represents a balanced

and sound transaction for the shareholder groups of

both Prosafe Production and BWO."

The cash consideration of the Offer will be financed

by BWO from available credit facilities. In

connection with the Offer, BWO has established a new

bridging credit facility of USD 1.1 billion from BW

Group Limited on competitive terms, with expiry in

November 2011. The new credit facility of USD 1.1

billion and available capacity from the existing

credit facility of USD 1.5 billion will be sufficient

to finance the entire cash consideration under the

Offer and also refinance Prosafe Production's

existing credit facilities, while also preserving

capacity for growth for the combined company going

forward. BWO will not issue any shares as a

consequence of the transaction other than the shares

to be issued to Prosafe Production shareholders as

consideration under the Offer.

The complete details of the Offer, including all

terms and conditions, will be contained in an Offer

Document to be sent to Prosafe Production

shareholders following review and approval by the

Oslo Stock Exchange and the Norwegian Financial

Supervisory Authority pursuant to Chapters 6 and 7 of

the Norwegian Securities Trading Act. As will be

further detailed and specified in the Offer Document,

the Offer will inter alia be subject to the following

conditions being satisfied or waived by BWO:

(i) The Offer, prior to the expiry of the acceptance

period for the Offer, having been accepted by

shareholders that, together with the shares already

owned by BWO, represent more than 90% of the total

number of Prosafe Production shares (on a fully

diluted basis); (ii) all necessary governmental and

regulatory approvals required in connection with the

Offer having been obtained; (iii) no governmental or

regulatory authority taking any form of legal action

(whether temporary, preliminary or permanent) that

restrains or prohibits the consummation of the Offer;

(iv) any third party consents or waivers required in

connection with the Offer having been obtained; (v)

no material adverse change occurring with respect to

Prosafe Production or any of its subsidiaries; (vi)

Prosafe Production and its subsidiaries operating in

the ordinary course of business; and (vii) no issue

of shares or equity instruments by Prosafe Production

or its subsidiaries and no distributions by Prosafe

Production.

As will be further detailed and specified in the

Offer Document, the consideration of 1.2 BWO shares

and NOK 5.25 in cash per Prosafe Production share is

conditional upon the sale by Prosafe Production of

its Turret Business on conditions as announced by

Prosafe Production in its stock exchange notice of 22

March 2010 being completed no later than two

Norwegian business days prior to expiry of the

acceptance period for the Offer. If this condition is

not met, then the Offer consideration will be reduced

to 1.2 BWO shares and NOK 2.0 in cash per Prosafe

Production share.

Prior to the Offer, BWO owns directly or indirectly

23.88% of the total number of shares in Prosafe

Production, while BW Euroholdings Limited, a wholly

owned subsidiary of BW Group (the largest shareholder

in BWO), owns 6.01% of the total number of shares in

Prosafe Production. BW Euroholdings Limited is a

close associate of BW Offshore pursuant to Section 2-

5 of the Norwegian Securities Trading Act.

BW Group Limited presently owns 66.95% of the total

number of shares in BWO. BW Group Limited will be

diluted to approximately 47% - 49% shareholding in

the combined company upon an acceptance level for the

Offer between 90% - 100%.

It is expected that the Offer Document will be sent

to Prosafe Production shareholders during the week

starting 12 July 2010. The acceptance period for the

Offer will be 20 U.S. business days from the date of

the Offer Document being released in order to allow

the Offer to be extended to certain Prosafe

Production shareholders in the United States of

America pursuant to an exemption from registration

requirements under the U.S. Securities Act (as

defined below). The acceptance period may be

extended, at any time and one or several times,

provided however that the acceptance period may not

exceed 10 weeks.

The Offer will not be made in any jurisdiction in

which the making of the Offer would not be in

compliance with the laws of such jurisdiction. This

notification does not in itself constitute an offer.

The Offer will only be made on the basis of the offer

document and can only be accepted pursuant to the

terms of such document. In the United States, the

Offer will only be made and the consideration shares

will only be offered to Prosafe Production

shareholders who are "qualified institutional buyers"

as defined in Rule 144A under the U.S. Securities Act

of 1933, as amended (the "U.S. Securities Act") in

transactions not involving any public offering within

the meaning of the U.S. Securities Act.

BWO invites analysts, investors and media to a

presentation of the Offer on Monday 21 June at 10:00

(CET) at the Carnegie Conference Center, Stranden 1B,

Aker Brygge.

The presentation will be webcast live on BWO's web

page www.bwoffshore.com

Carnegie ASA and HSBC Bank Plc are acting as

financial advisers to BWO in connection with the

Offer.

Advokatfirmaet Thommessen AS is BWO's legal advisor

as to Norwegian law in connection with the Offer.

For further information, please contact:

Carl K. Arnet, CEO BW Offshore, +65 9630 3290

Knut R. Sæthre, CFO BW Offshore, +47 9111 7876

Kristian Flaten, VP Finance and Investor Relations BW

Offshore, +47 9509 2322

About BW Offshore

BW Offshore is one of the world's leading FPSO

contractors and a market leader within advanced

offshore loading and production systems to the oil

and gas industry. BW Offshore has more than 25 years'

experience and has successfully delivered 14 FPSO

projects and 50 turrets and offshore terminals. BW

Offshore's technology division APL has delivered

solutions for production vessels, storage vessels and

tankers in a wide range of field developments.

Adapting through competence, in-house technology,

solid project execution and operational excellence,

BW Offshore ensures that customer needs are met

through versatile solutions for offshore oil and gas

projects. BW Offshore has a global network with

offices in Europe, Asia Pacific, West Africa and the

Americas. BW Offshore has 1,100 employees and is

listed on the Oslo Stock Exchange. For more

information, please visit www.bwoffshore.com and

www.apl.no.

This information is subject to the disclosure

requirements according to section 5-12 of the

Norwegian Securities Trading Act.

This announcement is not an offer for sale of any

securities in the United States. Securities may not

be offered or sold in the United States absent

registration or an exemption from registration under

the U.S. Securities Act. BW Offshore Limited has not

registered and does not intend to register any

portion of any offering of shares in the United

States or to conduct a public offering of any

securities in the United States.

This information is subject of the disclosure

requirements acc. to §5-12 vphl (Norwegian Securities

Trading Act)