UPDATE 1-Hercules' Seahawk assets buy under cloud on bribery probe
* Deal to buy Seahawk rigs under scanner
* SEC declines to comment
* Shares down 8 pct (Adds SEC reaction, background)
By Krishna N Das
BANGALORE, April 8 (Reuters) - An investigation to ascertain if Hercules Offshore Inc bribed officials overseas could cast a shadow on the shallow-water oil driller's plan to buy assets of Seahawk Drilling Inc .
Houston-based Hercules said on Thursday it was being probed by the U.S. Securities and Exchange Commission (SEC) for potential violations of the Foreign Corrupt Practices Act. The Department of Justice (DOJ) was also reviewing certain of the company's activities. [ID:nL3E7F73Q3]
"While obviously a negative, there are too few details to ascertain the degree of damage," Raymond James analysts said in a note.
"Does the investigation endanger the Seahawk acquisition?" the analysts asked.
As part of its bankruptcy protection proceedings, Seahawk intends to sell 20 rigs to Hercules for about $100 million. [ID:nL3E7DB22W]
Hercules -- whose international markets include West Africa, Latin America, India, the Middle East and Malaysia -- did not immediately reply to a voice mail seeking comment.
An SEC spokeswoman declined to comment. A DOJ spokesperson was not immediately available to comment.
The investigation will at least be a distraction, involving both personnel and financial resources, and though the extent is yet to be determined, the process could be drawn out, said Matt Beeby, analyst with Global Hunter Securities.
Late last year, Hercules' bigger rival Pride International Inc paid $56.2 million to settle a case related to bribing officials in Venezuela and Mexico. [ID:nSGE6B60CL]
Shares of Hercules were down 7 percent at $5.97 in morning trade on Friday on Nasdaq. They had earlier touched $5.50. (Reporting by Krishna N Das in Bangalore; Editing by Sriraj Kalluvila, Maju Samuel)
- Tweet this
- Share this
- Digg this
- U.S. drug regulator approves headband device to prevent migraines
- Malaysia military source says missing jet veered to west
- UPDATE 3-Republican Party wins Florida congressional seat in special election
- Wild theories fill void left by missing Malaysian plane
- When Zach met Barack: pitching Obamacare online
Consumer inflation and industrial output data on Wednesday will likely offer little evidence of a respite from high inflation and weak economic growth before a general election that begins next month. Full Article