UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities
Exchange Act of 1934
ENETI INC.
(Name of Subject Company)
ENETI INC.
(Name of Person Filing Statement)
Common stock, par value $0.01 per share
(Title of Class of Securities)
Y2294C107
(CUSIP Number of Class of Securities)
Emanuele Lauro
Chief Executive Officer
Eneti Inc.
99, Boulevard du Jardin Exotique
Monaco 98000
(Name, address and telephone number of person
authorized to receive notices and communications
on behalf of the persons filing statement)
With copies to:
Edward Horton
Nick Katsanos
One Battery Plaza
New York, New York 10004
(212) 574-1264
☐ |
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
TABLE OF CONTENTS
ITEM 1. SUBJECT COMPANY INFORMATION
Name and Address
The name of the company to which this Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any exhibits and annexes attached hereto, as it may be amended or supplemented, this “Schedule
14D-9”) relates is Eneti Inc., a company incorporated in the Republic of the Marshall Islands (“Eneti” or
the “Company”). The address of Eneti’s principal executive office is 99 Boulevard du Jardin Exotique, Monaco
98000. The telephone number of Eneti’s principal executive office is +377-9798-5715.
Securities
The title of the class of equity securities to
which this Schedule 14D-9 relates is Eneti’s common stock, par value $0.01 per share (the “Eneti Common Stock”).
As of the close of business on October 31, 2023, there were 38,647,119 shares of Eneti Common stock issued and outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
Name and Address
The name,
business address and business telephone number of Eneti, which is both the person filing this Schedule 14D-9 and the subject
company, are set forth above in Item 1 under the heading “Item 1. Subject Company Information—Name and Address”,
which information is incorporated herein by reference.
Tender Offer and Merger
This Schedule 14D-9 relates to a tender offer
by Cadeler A/S, a public limited liability company incorporated under the laws of Denmark (“Cadeler” or the “Purchaser”)
to exchange for each outstanding share of Eneti Common Stock validly tendered and not validly withdrawn in the offer, American Depositary
Shares (“ADSs”), representing, in the aggregate, 3.409 shares (the “Exchange Ratio”) of Cadeler,
nominal value DKK 1 per share (the “Purchaser Shares”) with each ADS representing four (4) Purchaser Shares (the
“Purchaser ADSs”), subject to payment of cash compensation with respect to any fractional Purchaser ADSs, without interest
and subject to reduction for any applicable withholding taxes (the “Offer Consideration”). The foregoing offer is referred
to as the “Offer.” The address of Cadeler’s principal executive office is Arne Jacobsens Allé 7, 7th
floor, DK-2300 Copenhagen S, Denmark. The telephone number of Cadeler’s principal executive office is +45-3246-3100.
The Offer is being made upon the terms and subject
to the conditions set forth in Purchaser’s prospectus/offer to exchange, dated November 7, 2023 (as it may be amended or supplemented
from time to time, the “Prospectus/Offer to Exchange”), and the related form of Letter of Transmittal (as it may be
amended or supplemented from time to time, the “Letter of Transmittal”), pursuant to the Business Combination Agreement,
dated June 16, 2023, by and among Eneti and Purchaser (as it may be amended from time to time, the “Business Combination
Agreement”). A more complete description of the Business Combination Agreement and the terms of the transactions can be found
in the sections of the Prospectus/Offer to Exchange entitled “Questions and Answers About the Offer and the Merger,”
“The Offer,” “Business Combination Agreement” and “Other Transaction Agreements”.
The Business Combination Agreement, the Prospectus/Offer to Exchange and the Letter of Transmittal are filed as Exhibits (e)(1),
(a)(2) and (a)(1), respectively, to this Schedule 14D-9 and are incorporated herein by reference. The Offer is described
in a Tender Offer Statement on Schedule TO (together with the exhibits thereto, as it may be amended from time to time, the “Schedule
TO”) filed by Purchaser with the Securities and Exchange Commission (“SEC”) on November 7, 2023.
The Offer Consideration shall be adjusted appropriately,
without duplication, to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution
of securities convertible into Eneti Common Stock or Purchaser Shares, as applicable), reorganization, recapitalization, reclassification,
combination, exchange of shares or other like change with respect to the number of shares of Eneti Common Stock or Purchaser Shares outstanding
after the date hereof and prior to the Acceptance Time, pursuant to the terms of the Business Combination Agreement. The “Acceptance
Time” for purposes of the Business Combination Agreement is the time that Purchaser accepts for payment all shares of Eneti Common
Stock that are validly tendered and not validly withdrawn pursuant to the Offer promptly after the Expiration Date (as defined below)
(as it may be extended pursuant to the terms of the Business Combination Agreement) or, at Purchaser’s election, concurrently with
the Expiration Date if all conditions to the Offer have been satisfied or waived in accordance with the Business Combination Agreement.
As promptly as practicable following the
consummation of the Offer, upon the terms and subject to the conditions of the Business Combination Agreement, Purchaser will
consummate a merger of a wholly owned subsidiary of Purchaser (“Merger Sub”) with and into Eneti with Merger Sub
surviving the Merger (the “Merger”). The purpose of the Merger is for Purchaser to acquire all shares of Eneti
Common Stock that it did not acquire in the Offer. Upon the consummation of the Merger, the Eneti business will be held by a wholly
owned subsidiary of Purchaser, and the holders of Eneti Common Stock other than Purchaser (the “Eneti
Stockholders”) will no longer have any direct ownership interest in the Eneti business (except that those Eneti
Stockholders who accept the Offer and tender their shares of Eneti Common Stock to Purchaser pursuant to the Offer will continue to
have an indirect ownership interest in the Eneti business through their ownership interest in Purchaser).
Purchaser commenced (within the meaning of Rule 14d-2 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) the Offer on November 7, 2023. Subject
to the terms and conditions of the Business Combination Agreement, the Offer is initially scheduled to expire at 4:30 P.M., Eastern time
on December 7, 2023 (the “Initial Expiration Date,” and such date or such subsequent date to which the Initial
Expiration Date is extended in accordance with the terms of the Business Combination Agreement, the “Expiration Date”).
Purchaser’s obligation to accept for exchange
shares of Eneti Common Stock validly tendered, and not validly withdrawn, pursuant to the Offer is subject to the satisfaction or waiver
by Purchaser of certain conditions, including the condition that, prior to the Expiration Date, there has been validly tendered and not
validly withdrawn a number of shares of Eneti Common Stock that, upon the consummation of the Offer, together with shares of Eneti Common
Stock then owned by Purchaser (if any), would represent at least 85.01% of the aggregate voting power of the shares of Eneti Common Stock
outstanding immediately after the consummation of the Offer (the “Minimum Condition”). For more information on the
conditions to the Offer, see Item 8.
The foregoing summary of the Offer, the Merger,
the Business Combination Agreement and the transactions contemplated thereby is qualified in its entirety by the more detailed description
and explanation contained in the Prospectus/Offer to Exchange, the Letter of Transmittal and the Business Combination Agreement, which
are filed as Exhibits (a)(2), (a)(1) and (e)(1), respectively, to this Schedule 14D-9 and are incorporated by
reference herein.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
Except as set forth or
incorporated by reference in this Schedule 14D-9, to the knowledge of Eneti, as of the date hereof, there are no material agreements,
arrangements or understandings, or any actual or potential conflicts of interest between Eneti or its affiliates, on the one hand, and
(i) Eneti’s executive officers, directors or affiliates, or (ii) Purchaser or its respective executive officers, directors
or affiliates, on the other hand.
The board of directors
of Eneti (the “Eneti Board”) was aware of the agreements, arrangements or understandings incorporated by reference
into this Item 3 during their respective deliberations of the merits of the Business Combination Agreement and considered them in determining
to make the recommendations set forth in this Schedule 14D-9.
Arrangements Between Eneti and Purchaser
Business Combination Agreement
On June 16, 2023, Eneti and Purchaser entered
into the Business Combination Agreement. A summary of the material terms of the Business Combination Agreement is included in the section
of the Prospectus/Offer to Exchange entitled “Business Combination Agreement” and is incorporated by reference herein.
The summary in the Prospectus/Offer to Exchange
may not contain all of the information about the Business Combination Agreement, the Offer and the Merger that is important to Eneti Stockholders.
Eneti Stockholders are encouraged to read the Business Combination Agreement, which has been filed as Exhibit (e)(1) to
this Schedule 14D-9 and incorporated herein by reference, carefully in its entirety.
Tender and Support Agreements
Concurrently with the execution of the Business
Combination Agreement, on June 16, 2023, (i) Eneti stockholders Scorpio Holdings Limited (“SHL”) and Scorpio
Services Holding Limited (“SSH”), (ii) Eneti directors Robert Bugbee, Roberto Giorgi, Christian M. Gut, Berit
Ledel Henriksen, Emanuele A. Lauro, James B. Nish, Einar Michael Steimler and Aileen Tan, and (iii) Eneti executive officers Hugh
Baker, Filippo Lauro and Cameron Mackey ((i)-(iii) collectively the “Supporting Stockholders”) entered into substantially
similar Tender and Support Agreements with Purchaser (the “Tender and Support Agreements”). Subject to the terms and
conditions of the Tender and Support Agreements, each Supporting Stockholder has agreed, among other things, to:
| · | cause all of such Supporting Stockholder’s shares of Eneti Common Stock to be validly and irrevocably
tendered into the Offer promptly following the delivery by Purchaser of written notice to each Supporting Stockholder on the Expiration
Date specifying that all of the conditions to the Offer have been satisfied (or are reasonably expected to be satisfied as of the Expiration
Date) or, where permissible, waived by Purchaser, assuming that all shares of Eneti Common Stock to be tendered by the Supporting Stockholders
are in fact validly tendered and not validly withdrawn in the Offer; and |
| · | certain restrictions on encumbering or transferring any of such Supporting Stockholder’s shares
of Eneti Common Stock. |
Each Tender and Support Agreement terminates automatically
upon the earliest to occur of the following: (a) the valid termination of the Business Combination Agreement in accordance with its
terms, (b) the consummation of the Merger, (c) the entry without the prior written consent of such Supporting Stockholder into
any amendment, waiver or modification to the Business Combination Agreement, or the terms of, or conditions to, the Offer (except, in
each case, for any amendment, waiver or modification that the Business Combination Agreement expressly contemplates as within the sole
discretion of Purchaser to make), that is material and adverse to the Eneti Stockholders and (d) the date on which such Supporting
Stockholder and Purchaser mutually agree to terminate the relevant Tender and Support agreement.
The shares of Eneti Common Stock subject to the
Tender and Support Agreements represented approximately 36% of the outstanding shares of Eneti Common Stock outstanding as of June 16,
2023.
The foregoing summary of the Tender and Support
Agreements does not purport to be a complete description of the terms and conditions thereof and is qualified in its entirety by reference
to the Tender and Support Agreements, copies of which have been filed as Exhibits (e)(2)-(14) to this Schedule 14D-9 and are incorporated
herein by reference.
Confidentiality Agreement
Eneti and Purchaser entered into a mutual confidentiality
agreement, dated February 1, 2023 (the “Confidentiality Agreement”) in connection with their evaluation of a potential
transaction that resulted in the execution of the Business Combination Agreement. Pursuant to the Confidentiality Agreement, subject to
certain customary exceptions, Eneti and Purchaser agreed to keep confidential all non-public information received from the other party.
Eneti and Purchaser also agreed that the non-public information furnished by the other party pursuant to the Confidentiality Agreement
would be used solely for the purpose of evaluating and negotiating the potential business combination.
The Confidentiality Agreement also provided for
an exclusivity period of ninety days (subsequently extended by amendment, initially to May 31, 2023 and thereafter to June 15,
2023). During the exclusivity period, each of Eneti and Purchaser agreed (a) to negotiate exclusively with each other in relation
to the potential business combination and not to enter into any negotiations or actively pursue a potentially competing process involving
either party and (b) to direct and use their respective commercially reasonable efforts to cause those of their respective shareholders
holding more than 17.5% of either of the party’s shares or voting rights (and such shareholders’ respective affiliates) not
to, directly or indirectly, initiate, solicit or knowingly encourage (including by way of furnishing information) any inquiries, proposals
or offers from any third party relating to an acquisition of, or potential business combination involving, either Eneti or Purchaser.
The Confidentiality Agreement also provided that each party would promptly notify the other in the case that either received any competing
offer.
The foregoing summary of the Confidentiality
Agreement does not purport to be a complete description of the terms and conditions thereof and is qualified in its entirety by reference
to the Confidentiality Agreement, a copy of which have been filed as Exhibit (e)(15) to this Schedule 14D-9 and is incorporated
herein by reference.
Arrangements Between Eneti and its Executive
Officers, Directors and Affiliates
Affiliated Ownership
The following table sets forth information regarding
beneficial ownership of Eneti Common Stock for (i) SSH, a related party, and (ii) Eneti’s directors and executive officers,
of which Eneti is aware as of October 31, 2023. All of the Eneti Stockholders, including the shareholders listed in the table below,
are entitled to one vote for each share of Eneti Common Stock held.
Name | |
No. of Shares | | |
% Owned (1) | |
Scorpio Holdings | |
| 11,119,181 | (2) | |
| 28.8 | % |
Directors and executive officers as a group | |
| 2,878,737 | | |
| 7.44 | % |
| (1) | Calculated based on 38,647,119 shares of Eneti Common Stock outstanding as of October 31, 2023. |
| | |
| (2) | This information is derived from a Schedule 13D/A filed with the SEC on March 27, 2023 by Scorpio
Holdings, its wholly owned subsidiary SSH, and Ms. Annalisa Lolli-Ghetti. Ms. Annalisa Lolli-Ghetti may be deemed to be the
ultimate beneficial owner of these shares by virtue of being the majority shareholder of Scorpio Holdings. Emanuele Lauro, Eneti’s
Chairman, Director and Chief Executive Officer, Robert Bugbee, Eneti’s Director and President, and Cameron Mackey, Eneti’s
Chief Operating Officer, own 10%, 10% and 7% of Scorpio Holdings, respectively. |
As of October 31, 2023, the shareholding
of Eneti’s directors and executive officers represented approximately 7.44% of the outstanding shares of Eneti Common Stock. Pursuant
to the Tender and Support Agreements and subject to the terms and conditions thereof, Eneti’s directors and executive officers have
agreed, among other things, to cause all of their shares of Eneti Common Stock to be validly and irrevocably tendered into the Offer promptly
following the delivery by Purchaser of written notice to each of them on the Expiration Date specifying that all of the conditions to
the Offer have been satisfied (or are reasonably expected to be satisfied as of the Expiration Date) or, where permissible, waived by
Purchaser, assuming that all shares of Eneti Common Stock to be tendered by them are in fact validly tendered and not validly withdrawn
in the Offer. Purchaser’s obligation to accept for exchange shares of Eneti Common Stock validly tendered, and not validly withdrawn,
pursuant to the Offer is subject to the satisfaction or waiver by Purchaser of certain conditions, including the condition that, prior
to the Expiration Date, there has been validly tendered and not validly withdrawn a number of shares of Eneti Common Stock that, upon
the consummation of the Offer, together with shares of Eneti Common Stock then owned by Purchaser (if any), would represent at least 85.01%
of the aggregate voting power of the shares of Eneti Common Stock outstanding immediately after the consummation of the Offer, unless
amended by Purchaser in its sole discretion. After the consummation of the Offer, the directors and officers of Eneti will not hold any
shares of Eneti Common Stock and will not have the right to vote on the Merger.
Interests of Eneti’s Directors and
Executive Officers in the Business Combination
In accordance with the terms of Eneti’s
2013 Equity Incentive Plan (the “2013 Equity Incentive Plan”), all outstanding and unvested restricted stock awards
of Eneti’s directors and officers will immediately vest in connection with the consummation of the Offer and will be automatically
exchanged into the right to receive the Offer Consideration, payments of change of control bonuses and severance payments under Eneti’s
change in control severance agreements and certain indemnification obligations.
In addition, certain of the named executive officers
of Eneti are party to employment contracts with Eneti that entitle them to receive certain severance and change in control payments in
connection with the consummation of the Offer and the termination of their employment with Eneti. In connection with the proposed acquisition
to acquire control of and, ultimately, the entire issued share capital of Eneti by Purchaser pursuant to the Offer and the Merger as contemplated
by the Business Combination Agreement (the “Business Combination”), the named executive officers party to the Eneti
employment agreements have entered into waiver agreements with Eneti pursuant to which they have agreed to waive certain amounts which
they would be entitled to receive under their existing employment agreements in exchange for the payment, in the aggregate, of $45.0 million
of severance and change of control payments under the employment contracts. The payment of this amount to those named executive officers
party to such waiver agreements is subject to the consummation of the Offer and the termination of such executives’ employment by
Eneti, and will constitute the satisfaction in full of all severance and change of control payments under their employment contracts.
Eneti Restricted Stock Awards
Each outstanding and unvested restricted stock
award granted under the 2013 Equity Incentive Plan shall accelerate and become fully vested and any forfeiture and transfer restrictions
thereon imposed under the 2013 Equity Incentive Plan will lapse in accordance with the terms of the 2013 Equity Incentive Plan, and shall
be automatically exchanged into the Offer Consideration and converted into a number of Purchaser ADSs based on the Exchange Ratio as of
immediately prior to the completion and acceptance of the Offer.
Management of Eneti’s Fleet
Commercial and Technical Management Agreements
- Master Agreement
Eneti’s drybulk vessels were commercially
managed by Scorpio Commercial Management S.A.M. (“SCM”), an entity controlled by the Lolli-Ghetti family of which
Emanuele Lauro, Eneti’s co-founder, Chairman and Chief Executive Officer, and Filippo Lauro, Eneti’s Vice President, are members,
and technically managed by Scorpio Ship Management S.A.M. (“SSM”), an entity controlled by the Lolli-Ghetti family,
pursuant to the master agreement between Eneti, SCM, and SSM dated September 27, 2013 (the “Master Agreement”),
which could have been terminated by any party upon 24 months’ notice, unless terminated earlier in accordance with its terms. In
the event of a sale of one or more drybulk vessels, a notice period of three months and a payment equal to three months of management
fees will apply, provided that the termination did not amount to a change of control, including a sale of all or substantially all drybulk
vessels, in which case a payment equal to 24 months of management fees will apply as was the case in the fourth quarter of 2020, when
the Eneti Board authorized, as part of Eneti’s transition to a sustainable future, to sell its remaining drybulk vessels and exit
the drybulk sector during 2021.
SCM’s commercial management services included
securing employment for Eneti’s drybulk vessels in the spot market or on time charters. SCM also managed the Scorpio Pools (spot
market-oriented vessel pools) including the Scorpio Ultramax Pool, the Scorpio Kamsarmax Pool and the Scorpio Capesize Pool in which most
of Eneti’s owned, finance leased and time chartered-in drybulk vessels were employed and from which a significant portion of Eneti’s
revenue was generated. For commercial management of any of Eneti’s drybulk vessels that did not operate in one of these pools, Eneti
paid SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. The Scorpio Ultramax Pool
and Scorpio Kamsarmax Pool participants, including Eneti and third-party owners of similar vessels, paid SCM a pool management fee of
$300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture.
SSM’s technical management services included
providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance
of drybulk vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring
regulatory and classification society compliance and customer standards. Eneti paid SSM an annual fee of $160,000 plus charges for certain
itemized services per drybulk vessel to provide technical management services for each of Eneti’s owned or finance leased drybulk
vessels. In addition, representatives of SSM, including certain subcontractors, previously provided Eneti with construction supervisory
services while Eneti’s drybulk vessels were being constructed in shipyards. For these services, Eneti compensated SSM for its direct
expenses, which varied between $200,000 and $500,000 per vessel.
Technical Support Agreement
On October 20, 2021, Eneti entered into a
technical support agreement with SSM, a related party, pursuant to which SSM provides technical advice and services to Eneti in connection
with the construction of Eneti’s newbuilding WTIVs at Hanwha Ocean. In consideration for these services, Eneti paid SSM a fee of
$671,200, and thereafter, will pay a monthly fee in the amount of $41,667.
Administrative Services Agreement
Effective September 21, 2021, Eneti entered
into the Amendment No. 1 to Administrative Services Agreement (the “Amended Administrative Services Agreement”)
with SSH, a related party, for the provision of administrative staff, office space and accounting, legal compliance, financial and information
technology services for which Eneti reimburses SSH for the direct and indirect expenses incurred while providing such services. The services
provided to Eneti by SSH may be sub-contracted to other entities.
In addition, SSH has agreed with Eneti not to
own any vessels engaged in seabed preparation, transportation, installation, operation and maintenance activities related to offshore
wind turbines so long as the Amended Administrative Services Agreement is in full force and effect. The agreement may be terminated by
either party providing three months’ notice.
Other Related Party Transactions
For the year ended December 31, 2021, Eneti
paid an aggregate $30.0 million to its senior management due to provisions in the employment contracts triggered by the acquisition of
Seajacks. Eneti was required to incur these costs at the time of the transaction in order to avoid adverse U.S. tax consequences. The
U.S. senior executive officers receiving these payments have agreed not to receive salaries for a period of three years and bonuses for
a period of four years.
During the year ended 2021, Eneti transferred
the existing lease finance arrangements of the SBI Tango, SBI Echo, and SBI Hermes, Ultramax bulk carriers, and SBI Rumba and SBI Samba,
Kamsarmax bulk carriers built in 2015, to affiliates of SHL, a related party, for consideration of $16.0 million.
During the year ended December 31, 2020,
Eneti time-chartered out four Kamsarmax vessels to the Scorpio Kamsarmax Pool for a period of 24-27 months at rates linked to the building
price index (“BPI”).
In October 2018, Eneti invested $100.0 million
in Scorpio Tankers Inc, for approximately 54.1 million shares (which was subsequently adjusted to 5.4 million shares after a one-for-ten
reverse stock split effected by Scorpio on January 18, 2019), or 10.9% (as of October 12, 2018), of Scorpio’s issued and
outstanding common shares. The investment was part of a larger $337.0 million equity raise by Scorpio through a public offering of its
common shares. Scorpio is a large international shipping company incorporated in the Republic of the Marshall Islands engaged in seaborne
transportation of refined petroleum products. Eneti and Scorpio have a number of common shareholders. They also share a number of directors
and officers, including Mr. Emanuele Lauro who serves as the Chairman and Chief Executive Officer of both companies, Mr. Robert
Bugbee, who serves as President and a Director of both companies, Mr. Cameron Mackey, who serves as Chief Operating Officer of both
companies, and Mr. Filippo Lauro, who serves as Vice President of both companies. In October 2019, the Eneti Board declared
a one-time special stock dividend to the Eneti Stockholders of an aggregate of approximately one million shares of common stock of Scorpio.
Following the payment of the special dividend, Eneti continued to own approximately 4.4 million common shares of Scorpio. In May 2020,
Eneti sold 2.25 million shares of Scorpio for aggregate net proceeds of approximately $42.7 million. In August 2022, Eneti sold the
remaining 2.16 million common shares of Scorpio it held for aggregate net proceeds of approximately $82.5 million, of which approximately
$50.0 million of shares were sold to Scorpio. There were no other significant transactions between Eneti and Scorpio.
The fees of certain consultants and the salaries
of certain Seajacks employees are allocated to Eneti for services performed for Eneti.
Eneti paid a related party port agent for supply
and logistical services for Eneti’s drybulk vessels, which were charged as vessel operating costs.
Eneti paid a related bunker supplier for bunkers
used by Eneti’s drybulk vessels, which were charged as voyage expenses.
Eneti pays a related party travel service provider
for travel services, such as flights, which are charged as general and administrative services.
As part of the Seajacks transaction, Eneti issued
subordinated redeemable notes totaling $70.7 million, with a final maturity of March 31, 2023 and which bore interest at 5.5% until
December 31, 2021 and 8.0% afterwards, to the former owners of Seajacks, who, in the aggregate, currently hold approximately 8.2
million common shares of Eneti. The redeemable notes were repaid in May 2022.
Eneti also assumed $87.7 million of subordinated,
non-amortizing debt due in September 2022 and owed to financial institutions with guarantees provided by the former owners of Seajacks
to whom Eneti paid a fee of 0.3% of the outstanding balance through November 2021 and 5.0% afterwards. This debt was repaid in February 2022.
Related Party Balances
For
the six months ended June 30, 2023 and 2022, Eneti had the following transactions with related parties, which have been included
in the Eneti’s condensed consolidated balance sheet:
| |
For the six months ended June 30, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
| |
Unaudited | |
| |
USD thousands | |
Vessel operating cost: | |
| | | |
| | |
Bunker supplier | |
$ | 874 | | |
$ | — | |
Port agent | |
| — | | |
| 5 | |
Total vessel operating cost | |
$ | 874 | | |
$ | 5 | |
General and administrative expense: | |
| | | |
| | |
SCM | |
$ | 53 | | |
$ | 24 | |
SSH | |
| 436 | | |
| 313 | |
SUK | |
| 140 | | |
| 321 | |
Scorpio Kamsarmax Pool | |
| (3 | ) | |
| (22 | ) |
Scorpio Ultramax Pool | |
| (36 | ) | |
| (85 | ) |
Total general and administrative expense | |
$ | 590 | | |
$ | 551 | |
Income from equity investment: | |
| | | |
| | |
Scorpio Tankers Inc. | |
$ | — | | |
$ | 47,197 | |
Financial expense, net | |
| | | |
| | |
Marubeni Corporation | |
$ | — | | |
$ | 804 | |
INCJ, Ltd | |
| — | | |
| 700 | |
Mitsui O.S.K, Lines Ltd. | |
| — | | |
| 51 | |
Total financial expense, net | |
$ | — | | |
$ | 1,555 | |
For the years ended December 31, 2022, 2021
and 2020, Eneti had the following transactions with related parties, which have been included in Eneti’s Consolidated Statements
of Operations:
| |
For the year ended December 31, | |
| |
2022 | | |
2021 | | |
2020 | |
| |
| | |
| | |
| |
| |
USD thousands | |
Vessel revenue | |
| | | |
| | | |
| | |
Scorpio Kamsarmax Pool | |
$ | — | | |
$ | 10,754 | | |
$ | 48,930 | |
Scorpio Ultramax Pool | |
| — | | |
| 5,638 | | |
| 81,682 | |
Total vessel revenue | |
$ | — | | |
$ | 16,392 | | |
$ | 130,612 | |
Voyage expense | |
| | | |
| | | |
| | |
SCM | |
$ | — | | |
$ | 2,582 | | |
$ | 1,449 | |
Bunker supplier | |
| — | | |
| 2,853 | | |
| 1,844 | |
Total voyage expense | |
$ | — | | |
$ | 5,435 | | |
$ | 3,293 | |
Vessel operating cost | |
| | | |
| | | |
| | |
SSM | |
$ | — | | |
$ | 2,799 | | |
$ | 11,547 | |
Port agent | |
| 4 | | |
| 293 | | |
| 399 | |
Total vessel operating cost | |
$ | 4 | | |
$ | 3,092 | | |
$ | 11,946 | |
| |
For the year ended December 31, | |
| |
2022 | | |
2021 | | |
2020 | |
| |
| | |
| | |
| |
| |
USD thousands | |
General and administrative expense: | |
| | | |
| | | |
| | |
SCM | |
$ | 47 | | |
$ | 220 | | |
$ | 71 | |
SSM | |
| — | | |
| 13 | | |
| 148 | |
SSH | |
| 567 | | |
| 1,783 | | |
| 5,992 | |
Scorpio UK Limited | |
| 458 | | |
| 1,119 | | |
| 1,869 | |
Eneti Senior Management | |
| — | | |
| 30,000 | | |
| — | |
Scorpio Kamsarmax Pool | |
| (158 | ) | |
| — | | |
| — | |
Scorpio Ultramax Pool | |
| (303 | ) | |
| — | | |
| — | |
Travel provider | |
| — | | |
| — | | |
| 23 | |
Total general and administrative expense | |
$ | 611 | | |
$ | 33,135 | | |
$ | 8,103 | |
Income (loss) from equity investment | |
| | | |
| | | |
| | |
Scorpio Tankers Inc. | |
$ | 55,538 | | |
$ | 4,353 | | |
$ | (105,384 | ) |
Loss on termination fees for assets held for sale | |
| | | |
| | | |
| | |
SCM | |
$ | — | | |
$ | 4,582 | | |
$ | 17,250 | |
SSM | |
| — | | |
| (1,344 | ) | |
| 17,789 | |
SSH | |
| — | | |
| (1,764 | ) | |
| 1,764 | |
Total write down on assets held for sale | |
$ | — | | |
$ | 1,474 | | |
$ | 36,803 | |
Financial expense, net | |
| | | |
| | | |
| | |
Marubeni Corporation | |
$ | 804 | | |
$ | 782 | | |
$ | — | |
INCJ, Ltd | |
| 700 | | |
| 680 | | |
| — | |
Mitsui O.S.K, Lines Ltd. | |
| 51 | | |
| 50 | | |
| — | |
Total financial expense, net | |
$ | 1,555 | | |
$ | 1,512 | | |
$ | — | |
At December 31, 2022 and 2021 and at June 30,
2023, respectively, Eneti had the following balances with related parties, which have been included in the consolidated balance sheets:
| |
As at June 30 | | |
As of December 31, | |
| |
2023 | | |
2022 | | |
2021 | |
| |
| | |
| | |
| |
| |
Unaudited | | |
| | |
| |
| |
| | |
USD thousands | | |
| |
Assets | |
| | |
| | |
| |
Due from related parties-current: | |
| | | |
| | | |
| | |
Scorpio Kamsarmax Pool | |
$ | 294 | | |
$ | 297 | | |
$ | 559 | |
Scorpio Ultramax Pool | |
| 624 | | |
| 604 | | |
| 1,566 | |
Scorpio Services Holding Limited | |
| 36 | | |
| — | | |
| — | |
Bunker Supplier | |
| 118 | | |
| — | | |
| — | |
Total due from related parties-current | |
$ | 1,072 | | |
$ | 901 | | |
$ | 2,125 | |
Equity investment in Scorpio Tankers Inc. | |
$ | — | | |
$ | — | | |
$ | 27,607 | |
Liabilities | |
| | | |
| | | |
| | |
Due to related parties-current: | |
| | | |
| | | |
| | |
SCM | |
$ | 41 | | |
$ | — | | |
$ | 107 | |
SSH | |
| — | | |
| 5 | | |
| — | |
Total due to related parties-current | |
$ | 41 | | |
$ | 5 | | |
$ | 107 | |
Redeemable notes: | |
| | | |
| | | |
| | |
Marubeni Corporation | |
$ | — | | |
$ | — | | |
$ | 27,422 | |
INCJ, Ltd | |
| — | | |
| — | | |
| 23,857 | |
Mitsui O.S.K, Lines Ltd. | |
| — | | |
| — | | |
| 1,736 | |
Total redeemable notes | |
$ | — | | |
$ | — | | |
$ | 53,015 | |
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Recommendation of the Eneti Board
At a meeting of the Eneti Board held on June 14,
2023, the Eneti Board, among other things, unanimously: (i) determined that the terms of the Business Combination Agreement and the
transactions contemplated by the Business Combination Agreement (the “Transactions”), including the Offer and the Merger,
are fair to, and in the best interests of, Eneti and the Eneti Stockholders; (ii) determined that it is in the best interests of
Eneti and the Eneti Stockholders and declared it advisable to enter into the Business Combination Agreement; (iii) approved the execution
and delivery by Eneti of the Business Combination Agreement, the performance by Eneti of its covenants and agreements contained in the
Business Combination Agreement and the consummation of the Offer, the Merger and the other transactions contemplated by the Business Combination
Agreement upon the terms and subject to the conditions contained in the Business Combination Agreement; and (iv) resolved to recommend
that the Eneti Stockholders accept the Offer and tender their shares of Eneti Common Stock to Purchaser pursuant to the Offer.
Accordingly,
and for the other reasons described in more detail below, the Eneti Board, having considered carefully the terms of the Offer, and various
factors described below under the caption “—Reasons for the Recommendation”, hereby
unanimously recommends that the shareholders of the Company accept the Offer and tender all of their shares of Eneti Common Stock pursuant
to the Offer.
Background for the Offer
Each of the Eneti Board and the board of directors
of Purchaser (the “Purchaser Board”) regularly reviews their respective company’s business, strategic direction,
performance and prospects in light of current and expected business and economic conditions, developments in the market for offshore wind
turbine installation and maintenance, and the competitive landscape in which their respective company operates. As part of their ordinary
course of business, the senior management of each of Eneti and Purchaser regularly evaluate operational and strategic opportunities, including
acquisitions, divestitures and other business combinations, that could complement their respective company’s activities and allow
it to achieve its strategic objectives.
On November 25, 2022, Mikkel Gleerup, the
Chief Executive Officer of Purchaser, met with representatives of DNB Markets, a part of DNB Bank ASA (“DNB”), financial
advisor to Purchaser, to discuss potential M&A opportunities within the offshore wind industry.
On November 29, 2022, Andreas Sohmen-Pao,
chairman of the Purchaser Board, telephoned Emanuele Lauro, in his capacity as chairman of Scorpio Holdings, to indicate that Purchaser
was interested in opening a dialogue regarding a potential business combination involving Purchaser and Eneti.
On December 12, 2022, representatives of
DNB Markets met in person in New York with Robert Bugbee, a director and President of Scorpio Holdings, and President of Eneti. During
the meeting, those present discussed potential M&A opportunities within the offshore wind industry, including the possibility of a
combination involving Eneti and Purchaser.
On December 16, 2022, representatives of
DNB Markets met with Mr. Gleerup to discuss DNB Markets’ meeting with Mr. Bugbee on December 12, 2022. DNB Markets
informed Mr. Gleerup that Mr. Bugbee had indicated that Eneti could be interested in engaging in discussions with respect to
a potential combination involving Eneti and Purchaser.
Between December 16, 2022 and January 5,
2023, representatives of each of DNB Markets and Purchaser’s senior management, including Mr. Gleerup, had an ongoing dialogue
about the potential for a combination of Eneti and Purchaser.
On January 5, 2023, Mr. Gleerup discussed
his conversations with DNB Markets regarding the potential combination of Eneti and Purchaser and the possible approach to such a combination
with the Purchaser Board. The Purchaser Board resolved to authorize continued discussions towards such a combination.
On January 13, 2023, Mr. Gleerup contacted
Mr. Bugbee by telephone to indicate that Purchaser was interested in opening a dialogue regarding a potential strategic combination
with Eneti. Mr. Bugbee told Mr. Gleerup that Eneti would be willing to discuss a potential strategic combination but only on
the basis of a written transaction proposal.
Later that day, Purchaser submitted to Mr. Lauro
and Mr. Bugbee, in their respective capacities as members of the board of directors of SSH, a non-binding indicative transaction
proposal for the combination of Purchaser with Eneti in a share exchange transaction. Pursuant to Purchaser’s non-binding proposal,
Eneti Stockholders would receive 3.106 Purchaser Shares for each outstanding share of Eneti Common Stock. The proposal further indicated
that Purchaser was willing to discuss an adjustment mechanism with respect to Eneti’s three NG-2500X vessels and that Purchaser
ascribed a value of USD 50 million to those vessels. The proposal noted that whilst Purchaser intended to retain its primary listing on
the OSE, it was willing to undertake a dual listing of the Purchaser Shares on the New York Stock Exchange (“NYSE”)
such that Eneti Stockholders would receive NYSE-listed Purchaser Shares. The proposal further noted that the transaction would require
the approval of SSH as the largest shareholder of Eneti and indicated that Purchaser would require a pre-acceptance undertaking from SSH
before Purchaser would approach the Eneti Board to initiate a formal process.
On January 15, 2023, Purchaser engaged Davis
Polk & Wardwell London LLP (“Davis Polk”) as U.S. legal counsel in connection with the contemplated transaction.
On January 18, 2023, Mr. Lauro contacted
Mr. Gleerup to discuss the proposed transaction. Mr. Lauro explained that Purchaser should approach Eneti directly, and not
SSH, to discuss a potential combination. On the same day, Mr. Lauro and Mr. Bugbee, on behalf of SSH, sent a letter to Purchaser
confirming receipt of Purchaser’s non-binding proposal of January 13, 2023 and stating that the proposed transaction should
be discussed through a collaborative process between Purchaser and Eneti. SSH declined to make any commitment to support a transaction
at that time.
On January 20, 2023, Purchaser submitted
to the Eneti Board a non-binding indicative transaction proposal for the combination of Purchaser and Eneti in a share exchange transaction.
The proposal indicated that Eneti Stockholders would receive 3.106 Purchaser Shares (or shares of an equivalent value in a newly incorporated
company that would serve as a holding company for the combined company). Based on the proposal, Eneti Stockholders would own, in the aggregate,
36.2% of the combined company upon completion of the proposed transaction. The proposal further indicated that Purchaser was willing to
discuss an adjustment mechanism with respect to Eneti’s three NG-2500X vessels, including alternative structures to carve out these
assets from the transaction perimeter, and that Purchaser ascribed a value of USD 50 million to those vessels. The proposal noted that
Purchaser intended for the combined company to be listed on the Oslo Stock Exchange (“OSE”) with a dual listing on
the NYSE. Finally, the proposal emphasized the importance to Purchaser that the transaction be a “friendly,” or negotiated,
transaction and that any transaction between Purchaser and Eneti would therefore be conditioned on the support of SSH (as Eneti’s
most significant shareholder, holding approximately 28.8% of the Eneti Common Stock) and each of the directors of Eneti.
On January 27, 2023, Mr. Lauro, on behalf
of Eneti, sent a letter confirming receipt of Purchaser’s non-binding proposal of January 20, 2023 and requesting further details
from Purchaser, including in relation to the proposed transaction structure and the envisioned board of directors for the combined company.
Later that day, Mr. Gleerup sent a letter
responding to Mr. Lauro and setting out additional details about the proposed transaction, including the envisaged composition of
the board of directors for the combined company and the relative valuations of each of Purchaser and Eneti based on publicly available
information. The response letter indicated that Purchaser envisaged a combined board of 7-8 people, consisting of 5 existing Purchaser
board members and 2-3 existing Eneti board members. Mr. Gleerup proposed that the parties enter into a mutual non-disclosure agreement,
a draft of which was attached to the response letter.
On February 1, 2023, Purchaser and Eneti
entered into a mutual non-disclosure agreement to facilitate confidential negotiations and due diligence. The mutual non-disclosure agreement
included a 90-day exclusivity clause.
On February 6, 2023, representatives of Purchaser’s
senior management, including Mr. Gleerup and Peter Brogaard Hansen, Purchaser’s Chief Financial Officer, met virtually with
representatives of Eneti’s senior management, including Mr. Bugbee and Cameron Mackey, Chief Operating Officer of Eneti, to
introduce their respective teams.
On February 8, 2023, Purchaser submitted
a due diligence request list and clean team protocol to Eneti.
On February 22, 2023, Purchaser shared with
Eneti a draft of Purchaser’s 2022 unaudited financial statements.
On February 24, 2023, representatives of
DNB Markets spoke by telephone with Mr. Bugbee to discuss the financial information provided to Eneti by Purchaser, and other procedural
matters including the scope of Purchaser’s due diligence request list and procedures for the exchange of due diligence information
between the parties.
On February 28, 2023, Mr. Gleerup submitted
a further letter to the Eneti Board reconfirming Purchaser’s commitment to continue exploring the transaction proposal, requesting
feedback from the Eneti Board on Eneti’s interest in exploring the proposal and seeking agreement on a defined process and timetable.
Mr. Gleerup brought to Eneti’s attention that the transaction proposal represented an implied premium of 25% to the price of
a share of Eneti Common Stock (as of market close on January 19, 2023), or 38% (as of market close on February 24, 2023).
On March 1, 2023, the Eneti Board held a
meeting to discuss Mr. Gleerup’s letter to the Eneti Board of February 28, 2023 and the engagement of Perella Weinberg
Partners LP (“Perella Weinberg”) as Eneti’s financial advisor in connection with the potential transaction. On
March 2, 2023, the Eneti Board approved the engagement of Perella Weinberg, and Perella Weinberg agreed, to assist Eneti in evaluating
Purchaser’s proposal.
On March 7 and 8, 2023, Mr. Gleerup
met in person with Mr. Bugbee in Oslo. During the meeting, Mr. Gleerup and Mr. Bugbee discussed the proposed transaction,
and in particular, the appointment of an appropriate diligence consultant to assist Eneti and the amount of anticipated transaction costs
related to the potential transaction.
On March 16, 2023, representatives of each
of Purchaser and Eneti held a call to discuss diligence procedures and the potential engagement of a diligence consultant to assist Eneti
in the due diligence process. On May 17, 2023, Eneti entered into an engagement letter with Perella Weinberg memorializing their
earlier agreement whereby Perella Weinberg would provide Eneti financial advisory services.
On March 30, 2023, at a special meeting of
the Eneti Board, representatives of Perella Weinberg reviewed with the Eneti Board Perella Weinberg’s preliminary financial analyses
of Eneti as a standalone company. At the meeting, the Eneti Board authorized Eneti’s senior management to engage in further discussions
with Purchaser.
On April 3, 2023, Mr. Mackey, Hugh Baker,
Chief Financial Officer of Eneti, and Eleni Nassopoulou, general counsel to Scorpio Holdings, met with Perella Weinberg to discuss process
generally and begin preparing a virtual data room to be used by the parties in connection with the proposed transaction.
On April 5, 2023, at the direction of the
Eneti Board, an introductory call was held between representatives of Perella Weinberg and DNB Markets. Perella Weinberg and DNB Markets
discussed preliminary scheduling matters and immediate next steps with respect to the proposal received by Eneti from Purchaser. On April 6,
2023, Perella Weinberg sent DNB Markets information to clarify the scope of the financial information to be exchanged between Eneti and
Purchaser.
On April 7, 2023, DNB Markets and representatives
of Perella Weinberg held a follow-up call to discuss the potential exchange of Purchaser and Eneti financial projections prepared by both
companies’ respective management teams. The parties agreed to prepare such financial projections based on publicly available equity
research models. Representatives of DNB Markets and Perella Weinberg continued to meet and discuss the scope of the financial projections
to be shared by each party over the subsequent days.
On April 13, 2023, Mr. Gleerup and Mr. Brogaard
Hansen spoke by telephone with representatives of Eneti, including Mr. Mackey, to discuss the publicly available equity research
model for Purchaser and certain underlying assumptions on which the model was based and on which Purchaser had provided public guidance.
On April 18, 2023, and April 21, 2023,
representatives of each of DNB Markets and Perella Weinberg participated in update calls to discuss Eneti’s follow-up questions
on the publicly available equity research model for Purchaser as well as the potential implications of Purchaser announcing the entry
into a firm contract with Siemens Gamesa to provide transportation and installation services related to a wind turbine project. Representatives
of DNB Markets and Perella Weinberg also discussed certain logistical matters regarding the non-binding indicative transaction proposal
received by Eneti from Purchaser. On behalf of Eneti, Perella Weinberg requested that Purchaser provide its management’s financial
projections for the combined company.
On April 20, 2023, Mr. Bugbee met in
person with Mr. Gleerup in New York to discuss the publicly available equity research model for Purchaser, as well as Eneti’s
view of what additional information to be exchanged between the parties, including management projections, would be required to further
advance discussions regarding the potential combination of Eneti and Purchaser.
On April 24, 2023, representatives of the
senior management of each of Eneti and Purchaser, together with representatives of DNB Markets and Perella Weinberg, held a call to discuss
diligence materials that had been shared among the parties.
On the same day, at the direction of the Eneti
Board, representatives of Perella Weinberg spoke with representatives of DNB Markets to communicate that Eneti was still considering Purchaser’s
initial written proposal and anticipated responding within the next several days.
On May 1, 2023, Mr. Lauro met in person
with Mr. Gleerup in Copenhagen to discuss the proposed business combination between Purchaser and Eneti and additional information
that Eneti and the Eneti Board felt was necessary to receive in connection with the evaluation of the proposed business combination. On
the same day, representatives of Perella Weinberg reviewed Perella Weinberg’s preliminary financial analyses of Eneti, Purchaser
and the combined company with Eneti’s management.
On May 2, 2023, in a telephone call with
DNB Markets, Perella Weinberg delivered, on behalf and at the direction of Eneti, a verbal counterproposal to Purchaser’s offer
of January 20, 2023. Eneti proposed that Eneti Stockholders would receive 3.409 Purchaser Shares for each share of Eneti Common Stock
(which would imply a 40% interest for Eneti’s Stockholders in the combined company, as compared to the 38% interest implied by Purchaser’s
initial proposal). Eneti further expressed its view that the value of the NG-2500 vessels was higher than the USD 50 million valuation
proposed by Purchaser and suggested that the parties explore avenues and adjustment mechanisms for a potential sale of such vessels. Eneti
further proposed proportional board representation in the combined company and expressed its expectation that the directors nominated
by Eneti to the Purchaser Board should have representation on key committees. Eneti’s counterproposal also included a request that
SSH be granted pre-emption rights with respect to future equity raises by the combined company, and a right of first offer with respect
to any future secondary sale of shares by BW Altor or Swire Pacific.
Between May 2, 2023, and May 8, 2023,
representatives of each of DNB Markets and Perella Weinberg, in each case as instructed by the management of Purchaser and Eneti, respectively,
held a series of negotiation calls on the ownership split in the combined company between Eneti Stockholders and existing holders of Purchaser
Shares (“Purchaser Shareholders”), governance matters related to the combined company and expected transaction costs.
In the course of such discussions, DNB Markets indicated that Purchaser may be willing to agree to Eneti’s request that the exchange
ratio be increased from Purchaser’s initial proposal to 3.409 Purchaser Shares for each share of Eneti Common Stock on the basis
that the transaction remained economically attractive to Purchaser (including in light of estimated syngergies) and that the parties would
take steps to limit expected transaction costs. On May 7, 2023, at the direction of Eneti’s management, Perella Weinberg relayed
to DNB Markets that Eneti’s executive officers had proposed, and would be prepared to agree, to waive certain amounts to which they
would be entitled to receive under their existing employment agreements in exchange for an aggregate payment of $45.0 million of severance
and change of control payments and that Eneti was prepared to move promptly to negotiate and execute definitive documentation for the
proposed transaction.
On May 3, 2023, a committee of the Purchaser
Board met to review and discuss various proposed legal structures for the potential combination of Purchaser with Eneti.
Between May 4, 2023, and May 8, 2023,
Mr. Gleerup and representatives of Eneti, including Mr. Lauro, Mr. Bugbee and Mr. Mackey engaged in further conversations
regarding the transaction proposal. Following these conversations, Mr. Gleerup and Mr. Mackey maintained direct communications
and spoke by telephone on several occasions.
On May 8, 2023, Purchaser and Eneti came
to a preliminary agreement as to the terms of a proposed combination, which included an exchange ratio of 3.409 Purchaser Shares for each
share of Eneti Common Stock and a combined company board consisting of eight directors (of whom three would initially be designated by
Eneti prior to closing). Later that day, Purchaser instructed its legal advisors to commence the drafting of a combination agreement.
On May 11, 2023, at a regularly scheduled
meeting of the Eneti Board at which Eneti’s management was present, representatives of Perella Weinberg provided the Eneti Board
an update on the status of negotiations with Purchaser and on the ongoing financial analysis done to date.
On May 12, 2023, Mr. Gleerup provided
an update on the state of negotiations with Eneti to the Purchaser Board. Following discussion, the Purchaser Board resolved to extend
the period of exclusivity under the mutual non-disclosure agreement to May 31, 2023. Later that day, the parties entered into an
amendment to their existing mutual non-disclosure agreement, extending the exclusivity of discussions between the parties to May 31,
2023.
On May 15, 2023, Mr. Gleerup, Mr. Brogaard
Hansen, and Pernille Korsager, General Counsel at Purchaser, together with representatives of Purchaser’s advisors, provided a walk-through
of the proposed transaction structure to representatives of Eneti, including Mr. Lauro, Mr. Mackey and Mr. Bugbee, and
its advisors.
On May 16, 2023, both parties opened virtual
data rooms to facilitate their respective due diligence. Between May 17, 2023 and the announcement of the proposed transaction, representatives
of each of the parties and their respective financial and legal advisors continued to exchange and review due diligence information and
various telephonic meetings were held to discuss the same.
On May 18, 2023, DNB Markets submitted a
first draft of the Business Combination Agreement to representatives of Perella Weinberg, which was subsequently shared with Eneti and
its legal counsel. Among other provisions, the draft provided that the combined company board would comprise eight directors (five to
be nominated by Purchaser and three by Eneti). Additionally, the draft provided that more than 90.01% of Eneti’s outstanding shares
would need to be tendered for the proposed transaction to be consummated (provided that Purchaser could unilaterally reduce such percentage
down to a lower threshold left unspecified in the draft) and indicated by footnote that the offer consideration could consist of ADSs
(rather than Purchaser Shares). Finally, the draft noted Purchaser’s continued expectation that SSH and each of the directors, as
well as the executive officers of, Eneti would commit to support the proposed transaction, in light of the importance to Purchaser that
the transaction be, in practice and perception, a “friendly,” or negotiated, transaction.
On May 23, 2023, representatives of each
of Purchaser and Eneti, and their respective legal and financial advisors, including Seward & Kissel LLP, legal counsel to Eneti
(“S&K”), participated in a call to discuss the Business Combination Agreement. On the same day, representatives
of each of Purchaser and Eneti, along with the parties’ respective advisors, discussed potential tax implications arising from the
proposed transaction and alternative transaction structures and both parties opened ‘clean team’ virtual data rooms to continue
their respective due diligence. Representatives of DNB Markets and Perella Weinberg exchanged projections prepared by the management of
their respective clients.
On May 24, 2023, DNB Markets submitted a
first draft of the Tender and Support Agreement to Eneti.
On May 25, 2023, representatives of each
of Purchaser and Eneti, together with the parties’ respective financial and legal advisors, spoke by telephone to discuss the structuring
of the proposed transaction.
On May 29, 2023, representatives of each
of Purchaser and Eneti, along with the parties’ respective financial advisors, spoke by telephone to discuss the parties’
respective views as to the potential synergies arising from the proposed transaction.
On May 30, 2023, S&K sent a revised draft
of the Business Combination Agreement to Purchaser and its advisors. Among other revisions, the draft provided for representations by
Purchaser as to compliance with permits, the ownership and maintenance of Purchaser’s vessels, and related party transactions. The
draft also proposed a reverse termination fee payable by Purchaser in the event that the Purchaser Board failed to confirm or otherwise
changed its recommendation in favor of the proposed transaction or approval by the Purchaser Shareholders was not obtained.
On June 1, 2023, Davis Polk sent a revised
draft of the Business Combination Agreement to Eneti and its advisors. The draft included drafting for the proposal that the offer consideration
consist of ADSs. The draft accepted Eneti’s proposal that Purchaser be required to pay a termination fee in the event that the Purchaser
Board failed to confirm or otherwise changed its recommendation in favor of the proposed transaction but rejected Eneti’s proposal
that a termination fee should apply if the Business Combination Agreement was to be terminated as a result of Purchaser having been unable
to obtain the approval of its shareholders. In addition, the draft indicated Purchaser’s expectation that the termination fee payable
by Eneti would be in the range of $30.0 million (or approximately 3% of Eneti’s enterprise value (including forecast capital expenditures)).
The parties subsequently agreed on that figure, and that the termination fee amount would be equal whether required to be paid by Eneti
or Purchaser.
On June 1, 2023 and June 9, 2023, at
regularly scheduled meetings of the Eneti Board at which Eneti’s management was present, representatives of Perella Weinberg provided
additional process updates and reviewed Perella Weinberg’s updated preliminary financial analyses with the Eneti Board, now reflecting
Purchaser’s management projections. On June 3, 2023, S&K returned minor comments on the draft Tender and Support Agreement
to Davis Polk. On June 5, 2023, Davis Polk sent a revised draft of the Tender and Support Agreement to Eneti, which the parties subsequently
acknowledged was in agreed form.
On June 6, 2023, a call was held between
representatives of each of Purchaser and Eneti, together with their respective legal and financial advisors, to discuss commercial and
legal points arising from the draft Business Combination Agreement. On the call, the parties agreed, amongst other things, that Purchaser
would seek to obtain commitments to vote in favor of the transaction from each of BW Altor and Swire Pacific. On the same day, S&K
sent a revised draft of the Business Combination Agreement to Davis Polk. Amongst other things, the revised draft included expanded interim
operating covenants applicable to Purchaser, and proposed a termination fee to be payable by Purchaser in the event that the parties were
to be unable to close the proposed transaction as a result of the decision of one or more antitrust or foreign investment authorities,
or the enactment of any antitrust or foreign investment law.
Also on June 6, 2023, and again on June 8,
2023, representatives of Purchaser, including Mr. Gleerup and Mr. Brogaard Hansen, and of Eneti, including Mr. Lauro and
Mr. Bugbee, along with the parties’ respective financial advisors, met telephonically to discuss various matters relating to
the parties’ respective financing and liquidity.
Finally, on June 6, 2023, the Purchaser Board
held a meeting to discuss the proposed business combination. Representatives of Davis Polk and Gorrissen Federspiel Advokatpartnerselskab
(“Gorrissen Federspiel”), Danish legal counsel to Purchaser, attended the meeting and provided the Purchaser Board
with an overview of the key changes to the proposed transaction since the Purchaser Board meeting held on May 12, 2023.
On June 9, 2023, Davis Polk sent a revised
draft of the Business Combination Agreement to Eneti, together with a draft of the voting undertaking proposed to be obtained from each
of BW Altor and Swire Pacific. Subsequently, Mr. Gleerup and Mr. Mackey spoke by telephone to discuss the key outstanding commercial
terms, including the minimum tender condition, the proposed antitrust termination fee, the valuation of the NG-2500X vessels and Eneti’s
flexibility with respect to a potential disposal of such vessels in the period between signing and closing of the Business Combination
Agreement, and the composition of the combined company board of directors. The parties agreed that the combined company board should consist
of six members, initially comprising four directors nominated by Purchaser and two directors by Eneti. Later on the same day, Davis Polk,
Gorrissen Federspiel and S&K held a call to discuss the foregoing and certain other matters relating to the Business Combination Agreement.
Also on June 9, 2023, S&K sent a draft
of the Eneti disclosure letter to Davis Polk and Purchaser and Davis Polk sent a draft of Purchaser’s disclosure letter to S&K.
Later that day, Davis Polk returned comments on the Eneti disclosure letter to S&K.
On June 10, 2023, S&K and Davis Polk
exchanged several drafts of the Business Combination Agreement and discussed various items via email, including matters relating to executive
compensation. S&K delivered to Davis Polk a draft of the form of waiver letter to be entered into by certain members of Eneti’s
senior management with respect to the change of control payments to which they could otherwise be entitled in connection with the proposed
transaction. On the same day, a call was scheduled between representatives of each of Purchaser and Eneti, together with their respective
legal and financial advisors, to discuss remaining open items with respect to the Business Combination Agreement, including the minimum
tender condition and Eneti’s flexibility with respect to a potential disposal of the NG-2500X vessels. With respect to the minimum
tender condition, though Purchaser had initially proposed that the condition be set at 90.01% in line with the minimum percentage holding
required to effect a short-form squeeze-out transaction in many jurisdictions Purchaser indicated that it was prepared to accept Eneti’s
counter-proposal of a minimum tender condition of 85.01% (waivable in Purchaser’s sole discretion to a lower threshold not less
than the number of shares required to approve the Merger in accordance with the Marshall Islands Business Corporations Act (“BCAMI”)
(being a majority of the outstanding shares of Eneti Common Stock, or 50% plus 1 share)), in light of Purchaser’s determination
that a “long-form” second-step merger, requiring a shareholder vote after the completion of the Offer, would be feasible under
Marshall Islands law and in the expectation that a lower minimum tender condition would increase the likelihood of the transaction successfully
completing, a factor that Eneti’s management had expressed to be important to the Eneti Board’s willingness to proceed with
the proposed transaction.
Also on June 10, 2023, S&K sent comments
on the proposed form of Purchaser voting undertaking. Gorrissen Federspiel subsequently sent a revised draft of the Purchaser voting undertaking
to S&K and discussion by email followed regarding the form of such undertaking.
Between June 10, 2023 and June 15, 2023,
Davis Polk and S&K worked to finalize the Business Combination Agreement and the ancillary documentation relating thereto, including
the parties’ respective disclosure schedules and the waiver letters referred to above.
On June 14, 2023, the Eneti Board held a
meeting to discuss the proposed business combination. Representatives of Perella Weinberg and S&K attended the meeting and provided
the Eneti Board with an overview of the proposed transactions and the terms of the Business Combination Agreement. Representatives from
Perella Weinberg reviewed with the Eneti Board Perella Weinberg’s financial analyses and indicated that it was prepared to render
an opinion, which was subsequently delivered to the Eneti Board on June 15, 2023, to the effect that, as of such date and based upon
and subject to the various assumptions made, procedures followed, matters considered and limitations set forth therein, the Exchange Ratio
in the proposed Offer pursuant to the Business Combination Agreement was fair, from a financial point of view, to the holders of Eneti
Common Stock. The text of the Perella Weinberg opinion is attached as Annex A to this Schedule 14D-9. Following the presentation
and discussion amongst the directors, the Eneti Board unanimously approved the Business Combination Agreement and other agreements and
transactions contemplated thereby.
Between June 14, 2023, and June 15,
2023, Mr. Brogaard Hansen and Michael Ferrante, financial controller at Eneti, discussed over email certain deferred tax liabilities
identified by Eneti in its disclosure letter.
On June 15, 2023, Davis Polk circulated to
all parties an execution version of the Business Combination Agreement.
On June 16, 2023, the Business Combination
Agreement and ancillary transaction documents were executed and released by Purchaser, Eneti and other parties to the transaction documents.
Prior to the opening for trading of the Purchaser Shares on the OSE, Purchaser and Eneti issued a joint press release announcing the execution
of the Business Combination Agreement and the other transaction agreements.
Reasons for the Recommendation
In reaching its decision to approve the Business
Combination Agreement, the Offer, the Merger and the transactions contemplated by the Business Combination Agreement and to recommend
by unanimous vote that the Eneti Stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer, the Eneti Board
consulted with Eneti’s senior management, as well as its legal and financial advisors, and considered a number of factors, including
the following, which it viewed as supporting its decision to approve the Business Combination Agreement, the Offer, the Merger and the
Transactions (not in any relative order of importance):
| · | that the proposed Offer Consideration to be issued to Eneti Stockholders represented a premium of approximately
26.7% to the historical trading price of Eneti Common Stock as of June 15, 2023 and that the Exchange Ratio is fixed; |
| · | the view that the combined company’s access to a larger, more diverse and modern fleet of next-generation
offshore windfarm installation vessels and expanded industry relationships will allow the combined company to target larger and more complex
projects than Eneti could as a stand-alone company; |
| · | the view that the Offer Consideration consisting of Purchaser ADSs will provide Eneti Stockholders the
opportunity to participate in the economic returns of the combined company; |
| · | the view that the Offer Consideration will provide Eneti Stockholders with liquidity for their entire
investment in Purchaser because the Purchaser ADSs will be traded on the NYSE; |
| · | the view that the terms and conditions of the Business Combination Agreement and the Transactions, including
the representations, warranties, covenants, closing conditions and termination provisions, are comprehensive and favorable to completing
the Transactions; |
| · | the Purchaser Board’s and Purchaser’s management’s familiarity with the business operations,
strategy, earnings and prospects of each of Purchaser and Eneti and the scope and results of the due diligence investigation of Purchaser
conducted by Eneti; |
| · | the written opinion of Perella Weinberg dated June 15, 2023, to the Eneti Board, to the effect that,
as of the date of such opinion and based upon and subject to the various assumptions made, procedures followed, matters considered, and
qualifications and limitations on the scope of the review undertaken by Perella Weinberg as set forth in such written opinion, the Exchange
Ratio in the proposed Offer pursuant to the Business Combination Agreement was fair from a financial point of view to the holders of Eneti
Common Stock, as described in greater detail in the section entitled “—Opinion of Perella Weinberg.” The full
text of the written opinion of Perella Weinberg, dated June 15, 2023, which sets forth assumptions made, procedures followed, matters
considered and qualifications and limitations on the scope of review undertaken by Perella Weinberg in rendering its opinion, is attached
as Annex A to this Schedule 14D-9 and is incorporated by reference herein in its entirety; and |
| · | the fact that Eneti has the right under the Business Combination Agreement to nominate two directors to
the Purchaser Board immediately following the completion of the Offer. |
The Eneti board also considered a variety of uncertainties
and risks and other potentially negative factors concerning the Transactions, including the following (not in any relative order of importance):
| · | the risk that the potential benefits of the combined company would not be fully recognized or not be recognized
within the expected time period, which could adversely impact the value of the Purchaser ADSs; |
| · | the risk that the Offer may not be consummated or may be unduly delayed despite Purchaser’s and
Eneti’s efforts including, among other causes, due to a failure to obtain regulatory approvals within the time periods expected; |
| · | the risks associated with the occurrence of events which may materially and adversely affect the operations
or financial condition of Purchaser and its subsidiaries prior to the closing of the Merger and which may not entitle Eneti to terminate
the Business Combination Agreement; and |
| · | various other risks associated with the acquisition and the businesses of Purchaser, Eneti and the combined
company, some of which are described under “Risk Factors.” |
The Eneti Board concluded that the potential negative
factors associated with the Business Combination were outweighed by the potential benefits of completing the Offer and the Merger. Accordingly,
the Eneti Board approved the Business Combination Agreement, the Offer and the Merger.
The foregoing discussion of the information and
factors considered by the Eneti Board is not intended to be exhaustive, but includes the material positive and negative factors considered
by the Eneti Board. In view of the variety of factors considered in connection with its evaluation of the Business Combination, the Eneti
Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in
reaching its determination. In addition, individual directors may have given different weights to different factors. The Eneti Board did
not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not
support its ultimate determination. The Eneti Board based its determination on the totality of the information presented.
In arriving at their respective recommendations,
the directors of Eneti were aware of the interests of certain of Eneti’s directors and executive officers as described in Item
3—Arrangement Between Eneti and its Executive Officers, Directors and Affiliates—Interests of Eneti’s Directors and
Executive Officers in the Business Combination.
Projections Prepared by Eneti’s Management
Although Eneti publicly issues limited short-term
guidance concerning certain aspects of its expected financial performance, it does not, as a matter of course, publicly disclose long-term
financial projections due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and
estimates. As a result, Eneti does not endorse unaudited management projections as a reliable indication of future results. The limited
unaudited management projections set out below are included in this Schedule 14D-9 solely because they were part of the financial information
made available to the Eneti Board in connection with its evaluation of the proposed transaction prior to entering into the Business Combination
Agreement and, at the direction of Eneti’s management, were also relied upon, without assuming any responsibility for independent
verification, by Perella Weinberg (except that the management projections relied upon by Perella Weinberg differed from the management
projections as detailed in footnote 7 to the data table in the Summary of Eneti Forecasts below), along with management projections for
Purchaser prepared by Purchaser management, which are described in the Prospectus/Offer to Exchange being provided to Eneti Stockholders
containing the terms of the Offer. Such management projections are not included in this Schedule 14D-9 to influence any Eneti Stockholder
to tender their shares of Eneti Common Stock or for any other purpose.
The inclusion of these unaudited management projections
should not be regarded as an indication that any of Eneti, Purchaser, their respective financial advisors or any of their respective affiliates,
officers, directors, partners, advisors or other representatives considered, or now considers, them to be an accurate prediction of actual
future results. There can be no assurance that the forward-looking results will be achieved or that actual results will not be significantly
higher or lower than estimated. None of Eneti, Purchaser or their respective advisors or representatives has made or makes any representation
regarding the information contained in the Eneti Forecasts (as defined below), and, except as may be required of Eneti by applicable securities
laws, none of them intends to update or otherwise revise or reconcile such forecasts to reflect circumstances existing after the date
they were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the
Eneti Forecasts are shown to be in error. The unaudited management projections presented below include Eneti’s management’s
forecasts of the expected future financial and operating performance of Eneti for the calendar years 2023 through and including 2027 (the
“Eneti Forecasts”). Select material line items, as well as material operating assumptions, are set forth below.
The Eneti Forecasts were based on a variety of
assumptions and estimates made at the time that such financial forecasts were prepared. The assumptions and estimates underlying such
forecasts may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies,
all of which are difficult to predict and many of which are beyond Eneti’s control. The assumptions and estimates used to create
the Eneti Forecasts involve judgments made with respect to, among other things, future economic, competitive and regulatory conditions
and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive
and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions
affecting the industry in which Eneti operates, and the risks and uncertainties described in the section of this Schedule 14D-9 titled
“Cautionary Statement Regarding Forward-Looking Statements,” all of which are difficult or impossible to predict accurately
and many of which are outside of Eneti’s control. The Eneti Forecasts also reflect assumptions as to certain business decisions
that are subject to change and that do not reflect any of the effects of the Transactions, or any other changes that may in the future
affect Eneti or its assets, business, operations, properties, policies, corporate structure, capitalization and management as a result
of the Business Combination or otherwise.
Eneti’s management, after discussions with
Purchaser, also estimated the timing and amount of projected realization of annual savings from pre-tax cost synergies for the combined
company. Any cost synergies (and the related costs necessary to achieve any such synergies) are not reflected in the Eneti Forecasts.
Although presented with numerical specificity,
the Eneti Forecasts are not fact and reflect numerous assumptions, estimates and judgments as to future events and the probability of
such events made by Eneti’s management, including the assumptions, estimates and judgments noted above. Since the Eneti Forecasts
cover multiple years, such information by its nature becomes less predictive with each successive year. There can be no assurance that
the assumptions, estimates and judgments used to prepare the Eneti Forecasts will prove to be accurate, and actual results may differ
materially from those contained in such forecasts. The Eneti Forecasts should not be viewed or construed as public guidance, and Purchaser
Shareholders and Eneti Stockholders are cautioned not to place undue reliance on the Eneti Forecasts included in this Schedule 14D-9.
The Eneti Forecasts are forward-looking statements. See also “Cautionary Statement Regarding Forward-Looking Statements.”
The Eneti Forecasts were prepared by Eneti in
connection with the Business Combination prior to execution of the Business Combination Agreement. These financial forecasts were prepared
by, and are the responsibility of, Eneti’s management. Neither PricewaterhouseCoopers Audit, Eneti’s independent registered
public accounting firm, nor any other independent accountant, have audited, reviewed, examined, compiled nor applied agreed-upon procedures
with respect to the Eneti Forecasts and, accordingly, neither PricewaterhouseCoopers Audit nor any other independent accountants express
an opinion or any other form of assurance with respect thereto. The report of PricewaterhouseCoopers Audit included in the Prospectus/Offer
to Exchange relates to Eneti’s previously issued financial statements. The foregoing report does not extend to the Eneti Forecasts
and should not be read to do so.
Summary of Eneti Forecasts
The Eneti Forecasts include projected information
at the individual vessel level and consolidated financial projections through 2027. The tables below present summaries of select material
line items and material operating assumptions with respect to each fiscal year during the period from 2023 through 2027.
| |
Eneti Forecasts (Management Projections)(7) ($ in millions) | |
| |
| 2023E | | |
| 2024E | | |
| 2025E | | |
| 2026E | | |
| 2027E | |
Revenue | |
$ | 136 | | |
$ | 181 | | |
$ | 292 | | |
$ | 349 | | |
$ | 349 | |
Vessel Operating Expenditure(1) | |
| (54 | ) | |
| (55 | ) | |
| (73 | ) | |
| (80 | ) | |
| (80 | ) |
Cash General & Administrative(2) | |
| (30 | ) | |
| (33 | ) | |
| (35 | ) | |
| (35 | ) | |
| (35 | ) |
Other Reimbursables(3) | |
| (7 | ) | |
| (8 | ) | |
| (8 | ) | |
| (8 | ) | |
| (8 | ) |
Non-Vessel-Related Project Costs(4) | |
| (1 | ) | |
| - | | |
| - | | |
| - | | |
| - | |
EBITDA(5) | |
| 45 | | |
| 85 | | |
| 176 | | |
| 226 | | |
| 226 | |
Depreciation & Amortization | |
| (32 | ) | |
| (29 | ) | |
| (48 | ) | |
| (53 | ) | |
| (53 | ) |
EBIT(6) | |
$ | 13 | | |
$ | 56 | | |
$ | 128 | | |
$ | 173 | | |
$ | 173 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Assumptions: | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Working Capital Investment | |
| 10 | | |
| 16 | | |
| 21 | | |
| 7 | | |
| - | |
Capital Expenditures | |
| 111 | | |
| 73 | | |
| 394 | | |
| - | | |
| - | |
| (1) | Vessel Operating Expenditure includes expenses relating to the Eneti Group’s core activities including
crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees. |
| (2) | Cash General & Administration includes expenses relating to the Eneti Group’s core activities
including staff costs, legal costs, marketing costs and other administration costs. |
| (3) | Other Reimbursables includes other operating expenses relating to the Eneti Group’s core activities
including fuel and specific charter equipment requests by the customer. |
| (4) | Reflects costs expected to be incurred in relation to a one-time extraordinary event. |
| (5) | EBITDA is earnings before interest, tax, depreciation and amortization. This metric is a non-GAAP measure. |
| (6) | EBIT is earnings before interest and tax. This metric is a non-GAAP measure. |
| (7) | The Eneti Board and, at the direction of Eneti’s management, Perella Weinberg, relied on Eneti management
projections which assumed the sale of the NG2500X vessels for $50 million in after-tax proceeds but were otherwise consistent with the
projections above. The resulting estimated revenue, EBITDA and EBIT, varying from those set forth above, were as follows: (i) Revenue
of $114 million in 2023E, $133 million in 2024E, $244 million in 2025E, $299 million in 2026E and $299 million in 2027E, (ii) EBITDA
of $35 million in 2023E, $65 million in 2024E, $152 million in 2025E, $203 million in 2026E and $203 million in 2027E, and (iii) EBIT
of $3 million in 2023E, $36 million in 2024E, $104 million in 2025E, $149 million 2026E, and $149 million in 2027E. |
The Eneti Forecasts should be read together with
the historical financial statements of Eneti incorporated by reference into the Prospectus/Offer to Exchange and the other information
regarding Eneti contained elsewhere in this Schedule 14D-9 and the Prospectus/Offer to Exchange. The Eneti Forecasts were not prepared
with a view toward public disclosure, nor were they prepared with a view toward compliance with the published guidelines of the SEC or
the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of management
projections.
ENETI HAS NOT UPDATED OR OTHERWISE REVISED AND
DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE FOR PURPOSES OF THIS SCHEDULE 14D-9. THE ABOVE UNAUDITED MANAGEMENT PROJECTIONS TO REFLECT
CIRCUMSTANCES EXISTING AFTER THE DATE PREPARED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE
ASSUMPTIONS UNDERLYING SUCH UNAUDITED MANAGEMENT PROJECTIONS ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY LAW.
Opinion of Perella Weinberg
The Eneti Board retained Perella Weinberg to act
as its financial advisor in connection with the Transactions. The Eneti Board requested that Perella Weinberg undertake a study to consider
the fairness, from a financial point of view, to the holders of Eneti Common Stock, of the Exchange Ratio in the proposed Offer pursuant
to the Business Combination Agreement. On June 15, 2023, Perella Weinberg delivered its opinion to the Eneti Board that, as of such
date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations
set forth therein, the Exchange Ratio to be received for each share of Eneti Common Stock in the proposed Offer pursuant to the Business
Combination Agreement was fair, from a financial point of view, to the holders of Eneti Common Stock.
The full text of Perella Weinberg’s written
opinion dated June 15, 2023, which sets forth, among other things, the assumptions made, procedures followed, matters considered
and qualifications and limitations on the review undertaken by Perella Weinberg, is attached as Annex A to this Schedule 14D-9
and is incorporated by reference herein.
Perella Weinberg’s opinion was addressed
to and provided for the information and assistance of the Eneti Board, in its capacity as such, in connection with, and for the purpose
of, the Eneti Board’s evaluation of the Exchange Ratio in the proposed Offer from a financial point of view and did not address
any other term, aspect or implication of the Business Combination Agreement or the Transactions. Perella Weinberg’s opinion did
not address the underlying decision by Eneti to engage in the Transactions nor the relative merits of the Transactions compared with any
alternative transactions or business strategies. Perella Weinberg’s opinion was not intended to be and did not constitute a recommendation
to any holder of Eneti Common Stock as to whether such holder should exchange their shares in the Offer or as to how such holder should
vote or otherwise act with respect to the Transactions or any other matter. Perella Weinberg’s opinion did not in any manner address
what the value of the Purchaser ADSs or Purchaser Shares actually will be when issued or the prices at which shares of Eneti Common Stock,
the Purchaser ADSs or Purchaser Shares will trade at any time, including following announcement or completion of the Transactions. In
addition, Perella Weinberg expressed no opinion as to the fairness of the consideration to be received by holders of Eneti Common Stock
in the Merger, the relative fairness of the Offer Consideration to be received by holders of Eneti Common Stock in the Offer as compared
to the consideration to be received by holders of Eneti Common Stock in the Merger or the fairness of the Transactions to the holders
of any other class of securities, creditors or other constituencies of Eneti. The description of Perella Weinberg’s opinion set
forth below is qualified in its entirety by reference to the full text of the opinion.
In arriving at its opinion, Perella Weinberg,
among other things:
| · | reviewed certain publicly available financial statements and other publicly available business and financial
information with respect to Eneti and Purchaser, including equity research analyst reports; |
| · | reviewed certain internal financial statements, analyses and forecasts (the “Eneti Opinion Forecasts”)
and other internal financial information and operating data relating to the business of Eneti, in each case, prepared by management of
Eneti and approved for Perella Weinberg’s use by management of Eneti; |
| · | reviewed certain internal financial statements, analyses and forecasts (the “Purchaser Opinion Forecasts”)
and other internal financial information and operating data relating to the business of Purchaser, in each case, prepared by management
of Purchaser and approved for Perella Weinberg’s use by management of Eneti; |
| · | discussed the past and current business, operations, financial condition and prospects of Eneti and the
combined company with senior management of Eneti, the Eneti Board and other representatives and advisors of Eneti; |
| · | discussed the past and current business, operations, financial condition and prospects of Purchaser and
the combined company with senior executives of Eneti and Purchaser, the Eneti Board and other representatives and advisors of Eneti and
Purchaser; |
| · | discussed with members of the senior managements of Eneti and Purchaser their assessment of the strategic
rationale for, and the potential benefits of, the Transactions; |
| · | reviewed certain estimates as to the amount and timing of certain cost savings and related expenses, operating
efficiencies, revenue effects and financial synergies anticipated by management of Purchaser and Eneti to result from the consummation
of the Transactions as approved for Perella Weinberg’s use by the management of Eneti; |
| · | reviewed the historical trading prices and trading activity for the Eneti Common Stock and the Purchaser
Shares; |
| · | participated in discussions among representatives of Eneti and Purchaser and their respective advisors; |
| · | reviewed a draft of the Business Combination Agreement dated June 15, 2023; and |
| · | conducted such other financial studies, analyses and investigations, and considered such other factors,
as Perella Weinberg deemed appropriate. |
For purposes of its opinion, Perella Weinberg
assumed and relied upon, without assuming any responsibility for independent verification, the accuracy and completeness of all of the
financial, accounting, legal, tax, regulatory and other information provided to, discussed with or reviewed by Perella Weinberg (including
information that was available from public sources) and further relied upon the assurances of management of Eneti that they were not aware
of any facts or circumstances that would make such information inaccurate or misleading in any material respect. With respect to the Eneti
Opinion Forecasts and the synergies anticipated by management of Purchaser and Eneti to result from the consummation of the Transactions,
Perella Weinberg was advised by management of Eneti and assumed, with Eneti’s consent, that they were reasonably prepared on bases
reflecting the best currently available estimates and good faith judgments of management of Eneti as to the future financial performance
of Eneti and the combined company, as applicable, and the other matters covered thereby and Perella Weinberg expressed no view as to the
reasonableness of the Eneti Opinion Forecasts or the synergies anticipated by management of Purchaser and Eneti to result from the consummation
of the Transactions or the assumptions on which they were based. With respect to the Purchaser Opinion Forecasts, Perella Weinberg was
advised by management of Eneti and assumed, with Eneti’s consent, that they were reasonably prepared on bases reflecting the best
currently available estimates and good faith judgments of management of Purchaser as to the future financial performance of Purchaser
and the other matters covered thereby and Perella Weinberg expressed no view as to the reasonableness of the Purchaser Opinion Forecasts
or the assumptions on which they were based. Perella Weinberg also assumed, with Eneti’s consent, that the financial results reflected
in the synergies anticipated by management of Purchaser and Eneti to result from the consummation of the Transactions would be realized
in the amounts and at the times projected. In arriving at its opinion, Perella Weinberg did not make and was not provided with any independent
valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities)
of Eneti, Purchaser or any of their respective subsidiaries (other than certain third-party vessel valuation reports). Perella Weinberg
did not assume any obligation to conduct, nor did it conduct, any physical inspection of the properties or facilities of Eneti, Purchaser
or any other party. In addition, Perella Weinberg did not evaluate the solvency of any party to the Business Combination Agreement, or
the impact of the Transactions thereon, including under any applicable laws relating to bankruptcy, insolvency or similar matters.
Perella Weinberg assumed that the final Business
Combination Agreement would not differ from the draft of the Business Combination Agreement reviewed by Perella Weinberg in any respect
material to its analysis or opinion. Perella Weinberg also assumed that (i) the representations and warranties of all parties to
the Business Combination Agreement and all other related documents and instruments that are referred to therein were true and correct
in all respects material to Perella Weinberg’s analysis and its opinion, (ii) each party to the Business Combination Agreement
and such other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed
by such party in all respects material to Perella Weinberg’s analysis and its opinion and (iii) the Transactions would be consummated
in a timely manner in accordance with the terms set forth in the Business Combination Agreement, without any modification, amendment,
waiver or delay that would be material to Perella Weinberg’s analysis or its opinion. Perella Weinberg also assumed that the Offer
and the Merger, taken together as a single integrated transaction, would qualify as a “reorganization” within the meaning
of Section 368(a) of the Code. In addition, Perella Weinberg assumed that in connection with the receipt of all approvals and
consents required in connection with the proposed Transactions, no delays, limitations, conditions or restrictions would be imposed that
would be material to its analysis.
Perella Weinberg’s opinion addressed only
the fairness from a financial point of view, as of the date thereof, of the Exchange Ratio in the proposed Offer pursuant to the Business
Combination Agreement. Perella Weinberg was not asked to, nor did it, offer any opinion as to any other term of the Business Combination
Agreement (including the consideration to be received by holders of Eneti Common Stock in the Merger) or any other document contemplated
by or entered into in connection with the Business Combination Agreement, the form or structure of the Transactions or the likely timeframe
in which the Transactions would be consummated. Perella Weinberg did not express any opinion with respect to the relative fairness of
the Offer Consideration to be received by holders of Eneti Common Stock in the Offer as compared to the consideration to be received by
holders of Eneti Common Stock in the Merger. In addition, Perella Weinberg expressed no opinion as to the fairness of the amount or nature
of any compensation to be received by any officers, directors or employees of any party to the Business Combination Agreement, or any
class of such persons, whether relative to the Exchange Ratio, the Offer Consideration or otherwise. Perella Weinberg expressed no opinion
as to the fairness of the Transactions to the holders of any other class of securities, creditors or other constituencies of Eneti, as
to the underlying decision by Eneti to engage in the Transactions or as to the relative merits of the Transactions compared with any alternative
transactions or business strategies. Nor did Perella Weinberg express any opinion as to any tax or other consequences that may result
from the transactions contemplated by the Business Combination Agreement or any other related document, although Perella Weinberg assumed
with Eneti’s consent for purposes of Perella Weinberg’s analysis that the Transactions would receive the tax treatment contemplated
by the Business Combination Agreement. Perella Weinberg’s opinion did not address any legal, tax, regulatory or accounting matters,
as to which Perella Weinberg understood Eneti received such advice as it deemed necessary from qualified professionals.
Perella Weinberg was not requested to, and it
did not, solicit third-party indications of interest in the possible acquisition of all or part of Eneti, nor was Perella Weinberg requested
to consider, and its opinion did not address, the underlying business decision by Eneti to engage in the Transactions or the relative
merits of the Transactions as compared with any alternative transactions or business strategies.
Perella Weinberg’s opinion was necessarily
based on financial, economic, market, monetary and other conditions as in effect on, and the information made available to Perella Weinberg
as of, the date of its opinion. It should be understood that subsequent developments may affect Perella Weinberg’s opinion and the
assumptions used in preparing it, and Perella Weinberg does not have any obligation to update, revise, or reaffirm its opinion. The issuance
of Perella Weinberg’s opinion was approved by a fairness committee of Perella Weinberg.
Summary of Material Financial Analyses
The following is a summary of the material financial
analyses performed by Perella Weinberg and reviewed by the Eneti Board in connection with Perella Weinberg’s opinion and does not
purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does
not represent the relative importance or weight given to those analyses by Perella Weinberg. Some of the summaries of the financial analyses
include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, these tables
must be read together with the text of each summary. These tables alone do not constitute a complete description of the financial analyses.
Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and
assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses. Future
results may differ from those described and such differences may be material. Price per share figures for Purchaser listed in the tables
below are based on exchange rates of EUR / USD of 1.091x and NOK / USD of 0.095x, respectively as of June 15, 2023.
Discounted Cash Flow Analysis
For each of Eneti and Purchaser, Perella Weinberg
performed a discounted cash flow analysis, which is a method of deriving an implied value range for a company’s equity securities
based on the sum of the present value of the company’s unlevered free cash flows over a forecast period and the present value of
the company’s terminal value at the end of the forecast period. The present value of a company’s unlevered free cash flows
and the present value of a company’s terminal value are added to derive an implied enterprise value for the company. An implied
equity value for the company is then calculated by adding the value of the company’s cash and subtracting the value of the company’s
debt from the implied enterprise value. The implied equity value is then divided by the number of outstanding shares of common stock of
the company to derive an implied per share equity value for the company’s common stock. In connection with this analysis, Perella
Weinberg used the Eneti Opinion Forecasts for Eneti and the Purchaser Opinion Forecasts for Purchaser. In performing this analysis, Perella
Weinberg:
| · | calculated the present value as of December 31, 2022, of the estimated standalone unlevered free
cash flows (calculated as net operating profit after tax, plus depreciation and amortization, minus capital expenditures, and adjusting
for changes in net working capital set forth in the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts) that each of Eneti and
Purchaser was forecasted to generate for calendar years 2023E through 2027E using discount rates ranging from 10.0% to 11.5% for Eneti
and 8.25% to 9.75% for Purchaser, in each case based on estimates of the weighted average cost of capital of each company; and |
| · | calculated the present value of the terminal values of each of Eneti and Purchaser using perpetuity growth
rates ranging from 1.5% to 2.5% for each of Eneti and Purchaser and the discount rates for each of Eneti and Purchaser as set forth above,
and added the present value of the terminal values to the present value of the unlevered free cash flows over the forecast period (including,
in the case of Eneti, the present value of certain tax benefits as provided by Eneti management) to derive an implied enterprise value
reference range for each of Eneti and Purchaser. |
From the reference ranges of implied enterprise
values generated by the foregoing analysis, for each of Eneti and Purchaser, Perella Weinberg derived reference ranges of implied equity
values by adding cash (including, in the case of Eneti, the present value of the expected after-tax proceeds from the sale of non-core
vessels as provided by Eneti management) and subtracting debt and net non-operating liabilities. Perella Weinberg then calculated the
implied equity values per share by dividing the implied equity values by the applicable number of fully-diluted shares (based upon the
number of issued and outstanding shares and other equity interests in each case as provided in company filings or by the managements of
Eneti and Purchaser, as applicable, and for Purchaser only using the treasury method for calculation of option dilution). The reference
ranges of implied equity values per share derived from these calculations are summarized in the following table, in each case as compared
to the closing share prices of Eneti Common Stock and Purchaser Shares as of June 15, 2023 of $11.72 and $4.53 per share, respectively.
Discounted Cash Flow Analysis
| |
Eneti | |
Purchaser |
Implied Equity Value Per Share | |
$22.91 - $32.27 | |
$12.84 - $20.27 |
Perella Weinberg then calculated the exchange
ratio ranges implied by the discounted cash flow analyses described above. For each of the foregoing discounted cash flow analyses, Perella
Weinberg calculated (i) the ratio of the highest implied equity value per share for Purchaser to the highest implied equity value
per share for Eneti, and (ii) the ratio of the lowest implied equity value per share for Purchaser to the lowest implied equity value
per share for Eneti, to calculate the following implied exchange ratio reference ranges:
| |
Implied Exchange Ratio
Range |
Discounted Cash Flow Analyses | |
1.5918x – 1.7849x |
This implied exchange ratio range can be compared
to the exchange ratio of 3.409 Purchaser Shares to be received for each share of Eneti Common Stock in the proposed Offer pursuant to
the Business Combination Agreement.
Additional Financial Analyses
Historical Share Price Analysis
For the information of the Eneti Board and for
reference purposes only, Perella Weinberg reviewed the share price performance of Eneti and Purchaser during various periods, including
the 52-week period ending on June 15, 2023. Perella Weinberg noted that the ranges of intraday low and high trading prices of Eneti
Common Stock and Purchaser Shares during the last 52-week period were as follows:
| |
Eneti | |
Purchaser |
LTM Share Price Trading Range | |
$5.13 - $12.04 | |
$2.79 - $4.85 |
Based on the minimum and maximum share prices
of Eneti and Purchaser, in each case, during the 52-week period ending on June 15, 2023, Perella Weinberg derived a reference range
of implied exchange ratios of Purchaser Shares to shares of Eneti Common Stock of 1.8397x to 2.4847x. This implied exchange ratio reference
range can be compared to the exchange ratio of 3.409 Purchaser Shares to be received for each share of Eneti Common Stock in the proposed
Offer pursuant to the Business Combination Agreement.
Research Analyst Price Targets
For the information of the Eneti Board and for
reference purposes only, Perella Weinberg observed the most recent publicly available price targets for Eneti Common Stock and Purchaser
Shares published by equity research analysts. The selected price targets reflect each research analyst’s estimate of the future
public market trading prices of shares of Eneti Common Stock and Purchaser Shares. Perella Weinberg noted that the research analysts’
price targets ranged from $13.00 to $16.00 per share for Eneti Common Stock and from $4.75 to $5.80 per share for Purchaser Shares. Perella
Weinberg then discounted the selected price targets to present value as of June 15, 2023, using estimates of the cost of equity for
Eneti and Purchaser of 17.25% and 14.00%, respectively. Perella Weinberg noted that the ranges of the present values of the research analyst
price targets for Eneti and Purchaser were as follows:
| |
Eneti | |
Purchaser |
PV of Research Analyst Price Targets | |
$11.26 - $13.94 | |
$4.24 - $5.23 |
Based on comparisons of the high and low present
values of the research analyst price targets for Eneti and Purchaser, Perella Weinberg derived a reference range of implied exchange ratios
of Purchaser Shares to shares of Eneti Common Stock of 2.6534x to 2.6669x. This implied exchange ratio reference range can be compared
to the exchange ratio of 3.409 Purchaser Shares to be received for each share of Eneti Common Stock in the proposed Offer pursuant to
the Business Combination Agreement.
Illustrative Present Value of Implied Future
Share Price Analysis
For the information of the Eneti Board and for
reference purposes only, Perella Weinberg performed an illustrative analysis of the implied present value of an illustrative future value
per share of Eneti Common Stock and Purchaser Shares, using the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts, respectively.
Perella Weinberg derived a range of theoretical future enterprise values for each of Eneti and Purchaser as of December 31, 2026
by applying a range of illustrative next twelve months’ (“NTM”) enterprise value to earnings before interest, taxes,
depreciation and amortization (“EV / EBITDA”) multiples of 6.0x to 8.0x for Eneti and of 8.0x to 10.0x for Purchaser to estimates
of each of Eneti’s and Purchaser’s respective run-rate EBITDA for the calendar year 2027. Perella Weinberg then calculated
theoretical future equity values for each of Eneti and Purchaser by adding cash (including, in the case of Eneti, the present value of
the expected after-tax proceeds from the sale of non-core vessels as provided by Eneti management) and subtracting debt and net non-operating
liabilities as of December 31, 2026, as per the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts. Perella Weinberg then
discounted the theoretical future equity values for each of Eneti and Purchaser to present values as of June 15, 2023, using a reference
range of the cost of equity for each of Eneti and Purchaser of 16.00% to 18.50% and 12.75% to 15.25%, respectively, and calculated the
implied equity values per share by dividing the implied equity values by the applicable number of fully-diluted shares (based upon the
number of issued and outstanding shares and other equity interests in each case as provided in company filings or by the managements of
Eneti and Purchaser, as applicable, and for Purchaser only using the treasury method for calculation of option dilution). Perella Weinberg
noted that the reference ranges of the present value of implied future share price for Eneti and Purchaser were as follows:
| |
Eneti | |
Purchaser |
Present Value of Implied Future Share Price | |
$14.13 - $21.18 | |
$7.63 - $10.92 |
Based on comparisons of the high and low present
values of the implied future share prices for Eneti and Purchaser, Perella Weinberg derived a reference range of implied exchange ratios
of Purchaser Shares to shares of Eneti Common Stock of 1.8524x to 1.9401x. This exchange ratio reference range can be compared to the
exchange ratio of 3.409 Purchaser Shares to be received for each share of Eneti Common Stock in the proposed Offer pursuant to the Business
Combination Agreement.
Illustrative Has / Gets Analysis
For the information of the Eneti Board and for
reference purposes only, Perella Weinberg performed an illustrative Has / Gets analysis in order to compare (i) the implied equity
value per share reference ranges for the Eneti Common Stock on a standalone basis, and (ii) the implied equity value per share reference
ranges for the number of Purchaser Shares that holders of Eneti Common Stock will receive in connection with the proposed Offer, assuming
an Exchange Ratio of 3.409 Purchaser Shares for each share of Eneti Common Stock. The illustrative Has / Gets analysis was based on the
illustrative present value of implied future share price analysis and the discounted cash flow analyses for each of Eneti and Purchaser
described above. The Has / Gets analysis also took into account certain illustrative synergy realization scenarios, prepared by the managements
of Eneti and Purchaser and approved by Eneti for Perella Weinberg’s use, regarding potential revenue, cost and financing synergies
anticipated by the managements of Eneti and Purchaser to result from the consummation of the Transactions.
Pursuant to its illustrative Has / Gets analysis,
Perella Weinberg performed an illustrative analysis of the implied present value of an illustrative future value per share of the combined
company, pro forma for the proposed Transactions, using the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts. Perella Weinberg
derived a range of theoretical future enterprise values for the combined company as of December 31, 2026 by applying a range of illustrative
NTM EV / EBITDA multiples of 7.4x to 9.4x to estimates of the combined company’s run-rate EBITDA for the calendar year 2027. Perella
Weinberg then calculated theoretical future equity values for the combined company by adding cash (including the present value of the
expected after-tax proceeds from the sale of non-core vessels as provided by Eneti management) and subtracting debt and net non-operating
liabilities as of December 31, 2026 as per the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts, and by adding the illustrative
equity value created by potential revenue, cost and financing synergies anticipated by the managements of Eneti and Purchaser to result
from the Transactions for each of three scenarios: (i) assuming a 100% realization of revenue, cost and financing synergies, (ii) assuming
a 50% realization of revenue synergies and a 100% realization of cost and financing synergies, and (iii) assuming a 0% realization
of revenue synergies and a 100% realization of cost and financing synergies, in each case calculated assuming a 7.0x terminal value multiple.
Perella Weinberg then discounted the theoretical future equity values for the combined company to present values as of June 15, 2023,
using a reference range of the cost of equity for the combined company of 12.75% to 15.25%, and calculated the implied equity values per
share by dividing the implied equity values by the projected number of fully-diluted shares of the combined company (based upon the number
of issued and outstanding shares and other equity interests as projected by the managements of Eneti and Purchaser, and for Purchaser
only using the treasury method for calculation of option dilution). Perella Weinberg then derived the implied equity value per share attributable
to the shares of the combined company held by holders of Eneti Common Stock, assuming a 3.409x Exchange Ratio in the proposed Offer. The
implied equity value per share reference ranges derived from the illustrative present value of implied future share price analysis of
the combined company are summarized in the following table, in each case as compared to the illustrative equity value per share of the
Eneti Common Stock on a standalone basis.
Present Value of Implied Future Share Price
– Has / Gets Analysis
Illustrative Synergy Realization Scenario | |
Eneti Common Stock Standalone (Has) | |
Common Stock of combined company (Gets) |
0% Revenue; 100% Cost & Financing Synergies | |
$14.13 - $21.18 | |
$23.40 - $33.85 |
50% Revenue; 100% Cost & Financing Synergies | |
$14.13 - $21.18 | |
$25.45 - $36.61 |
100% Revenue; 100% Cost & Financing Synergies | |
$14.13 - $21.18 | |
$27.49 - $39.37 |
Pursuant to its illustrative Has / Gets analysis,
Perella Weinberg also performed a discounted cash flow analysis of the combined company, pro forma for the proposed Transactions, using
the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts. In performing this analysis, Perella Weinberg:
| · | calculated the present value as of December 31, 2022, of the estimated unlevered free cash flows
of the combined company (calculated as net operating profit after tax, plus depreciation and amortization, minus capital expenditures,
and adjusting for changes in net working capital based on the Eneti Opinion Forecasts and the Purchaser Opinion Forecasts) that the combined
company was forecasted to generate for calendar years 2023E through 2027E using discount rates ranging from 8.25% to 9.75%, based on estimates
of the weighted average cost of capital of the combined company; and |
| · | calculated the present value of the terminal value of the combined company using perpetuity growth rates
ranging from 1.5% to 2.5% and the discount rates as set forth above, and added the present value of the terminal value to the present
value of the unlevered free cash flows over the forecast period (including the present value of certain tax benefits of Eneti as provided
by Eneti management) to derive an implied enterprise value reference range for the combined company. |
From the reference range of implied enterprise
values generated by the foregoing analysis of the combined company, Perella Weinberg derived reference ranges of implied equity values
by adding cash (including the present value of the expected after-tax proceeds from the sale of non-core vessels as provided by Eneti
management) and subtracting debt and net non-operating liabilities, and by adding the illustrative equity value created by potential revenue,
cost and financing synergies anticipated by the managements of Eneti and Purchaser to result from the Transactions for each of three scenarios
described above. Perella Weinberg then calculated the implied equity values per share of the combined company by dividing the implied
equity values by the projected number of fully-diluted shares of the combined company (based upon the number of issued and outstanding
shares and other equity interests in each case as provided by the managements of Eneti and Purchaser, and for Purchaser only using the
treasury method for calculation of option dilution). The reference ranges of implied equity values per share of the combined company derived
from these calculations are summarized in the following table, in each case as compared to the equity values per share of the Eneti Common
Stock on a standalone basis.
Discounted Cash Flow – Has / Gets Analysis
Illustrative Synergy Realization Scenario | |
Eneti Common Stock Standalone (Has) | |
Common Stock of combined company (Gets) |
0% Revenue; 100% Cost & Financing Synergies | |
$22.91 - $32.27 | |
$41.04 - $64.03 |
50% Revenue; 100% Cost & Financing Synergies | |
$22.91 - $32.27 | |
$44.88 - $69.66 |
100% Revenue; 100% Cost & Financing Synergies | |
$22.91 - $32.27 | |
$48.72 - $75.29 |
Miscellaneous
The preparation of a fairness opinion is a complex
process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary
set forth herein, without considering the analyses or the summary as a whole could create an incomplete view of the processes underlying
Perella Weinberg’s opinion. In arriving at its fairness determination, Perella Weinberg considered the results of all of its analyses
and did not attribute any particular weight to any factor or analysis considered. Rather, Perella Weinberg made its determination as to
fairness on the basis of its experience and professional judgment after considering the results of all of its analyses.
Perella Weinberg prepared the analyses described
herein for purposes of providing its opinion to the Eneti Board as to the fairness, from a financial point of view, to the holders of
Eneti Common Stock, as of the date of such opinion, of the Exchange Ratio in the proposed Offer pursuant to the Business Combination Agreement.
These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold.
Perella Weinberg’s analyses were based in part upon third-party research analyst estimates and/or management forecasts by Eneti
and Purchaser, which are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested
by Perella Weinberg’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors
or events beyond the control of the parties to the Business Combination Agreement or their respective advisors, none of Eneti, Purchaser,
Perella Weinberg or any other person assumes responsibility if future results are materially different from those forecasted by third
parties or the managements of Eneti and Purchaser.
As described above, the opinion of Perella Weinberg
to the Eneti Board was one of many factors taken into consideration by the Eneti Board in making its determination to approve the Transactions.
The type and amount of consideration payable in the Transactions, including the Exchange Ratio in the proposed Offer, was determined through
negotiations between Eneti and Purchaser, rather than by any financial advisor, and was approved by the Eneti Board. Eneti’s decision
to enter into the Business Combination Agreement was solely that of the Eneti Board.
Perella Weinberg acted as financial advisor to
the Eneti Board in connection with, and participated in certain negotiations leading to, the Transactions. For its services in connection
with the Transactions, Perella Weinberg will receive an aggregate fee, estimated based on the information that is available as of the
date of the public announcement of the Transactions, of approximately $15 million, $2.5 million of which was payable in connection with
the delivery of Perella Weinberg’s opinion and the remainder of which is contingent upon consummation of the Transactions. Eneti
also agreed to reimburse Perella Weinberg for its reasonable and documented out-of-pocket expenses and to indemnify Perella Weinberg and
related persons for certain liabilities and other items that may arise out of its engagement by Eneti and the rendering of its opinion.
Perella Weinberg has provided investment banking
services to Eneti or its affiliates on matters unrelated to the Transactions during the two-year period prior to the date of its opinion,
for which Perella Weinberg has received compensation, including serving as financial advisor to Hermitage Offshore Services Ltd. in connection
with a financial restructuring. Except in connection with Perella Weinberg’s engagement as financial advisor to Eneti in connection
with the Transactions, and as stated in the immediately preceding sentence, during the two-year period prior to the date hereof, no material
investment banking relationship existed between Perella Weinberg or its affiliates, on the one hand, and Purchaser or any of its affiliates,
on the other hand, pursuant to which Perella Weinberg or its affiliates has received or anticipates receiving compensation. However, Perella
Weinberg and its affiliates in the future may provide investment banking and other financial services to Eneti and/or Purchaser and their
respective affiliates and in the future may receive compensation for the rendering of these services. In the ordinary course of its business
activities, Perella Weinberg and its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions,
for its own account or the accounts of customers or clients, in (i) debt, equity or other securities (or related derivative securities)
or financial instruments (including bank loans or other obligations) of Eneti, Purchaser or any of their respective affiliates and (ii) any
currency or commodity that may be material to the parties or otherwise involved in the Merger.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYES, COMPENSATED OR USED
Neither Eneti nor any
person acting on its behalf has employed, retained or compensated any person to make solicitations or recommendations to Eneti’s
Stockholders on its behalf concerning the Offer or the Merger, except that such solicitations or recommendations may be made by directors,
officers or employees of Eneti, for which services no additional compensation will be paid.
The Company, based on
the determination of the Eneti Board to do so, has engaged Perella Weinberg as its financial advisor in connection with its strategic
review process, including with respect to the fairness of the Offer, but not to make any solicitation or recommendation in connection
with the Offer, the Merger or otherwise. In connection with such engagement, Perella Weinberg provided to the Eneti Board the opinion
described in Item 4 under the headings “Item 4. The Solicitation or Recommendation—Opinion of Perella Weinberg” and
“—Background of the Offer and the Merger” and filed as Annex A hereto and incorporated herein by
reference. Perella Weinberg’s opinion to the Eneti Board does not constitute a recommendation to any Eneti Stockholder as to whether
or not such Eneti Stockholder should tender their shares of Eneti Common Stock in connection with the Offer, or otherwise act with respect
to the Transactions or any other matter. In connection with Perella Weinberg’s services as the financial advisor to the Company,
the Company has agreed to pay Perella Weinberg an aggregate fee of $15.0 million.
Additional information
related to Perella Weinberg’s retention as Eneti’s financial advisor is set forth under the caption entitled “Item
4. The Solicitation or Recommendation—Opinion of Perella Weinberg” and “—Background of the Offer
and the Merger” and is hereby incorporated herein by reference. Eneti selected Perella Weinberg as its financial advisor based
upon, among other things, Perella Weinberg’s longstanding relationship and familiarity with the Company and its business, as well
as Perella Weinberg’s experience and expertise in the wind energy industry and its status as an internationally recognized investment
banking firm that has substantial experience in transactions similar to the Offer and Merger.
ITEM 6. INTERESTS IN SECURITIES OF THE SUBJECT COMPANY
No transactions in the shares of Eneti Common
Stock have been effected during the past 60 days by the Company, or, to the Company’s knowledge after making reasonable inquiry,
by any of the directors, executive officers or affiliates of the Company.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Except as set forth in this Schedule 14D-9 or
as incorporated herein by reference, Eneti is not undertaking or engaged in any negotiations in response to the Offer that relate to:
| · | a tender offer or other acquisition of Eneti’s securities; |
| · | any extraordinary transaction, such as a merger, reorganization or liquidation, involving Eneti or any
of its subsidiaries; |
| · | any purchase, sale or transfer of a material amount of assets of Eneti or any of its subsidiaries; or |
| · | any material change in the present dividend rate or policy, or indebtedness or capitalization of Eneti. |
Except as set forth in this Schedule 14D-9, there
are no transactions, resolutions of the Eneti Board, agreements in principal or signed contracts that were entered into in response to
the Offer that relate to, or would result in, one or more of the matters referred to in the immediately preceding paragraph of this Item
7.
In July 2023, the Company entered into an
agreement with an unaffiliated third party to sell the Seajacks Hydra, Seajacks Leviathan and the Seajacks Kraken,
the Company’s three NG2500X vessels, for approximately $70.0 million in the aggregate. On October 18, 2023, Seajacks Kraken
was delivered to its buyer. Delivery of the remaining vessels is expected to take place before the end of 2023. The sale is expected to
provide net cash proceeds of approximately $56.7 million after the partial repayment of USD 12.6 million for certain amounts payable on
the term loan tranche under Eneti’s five year credit facility of $175.0 million pursuant to its agreement with DNB Capital LLC,
Société Générale, Citibank N.A., Credit Agricole Corporate and Investment Bank and Credit Industriel et Commercial
and payment of a USD 0.7 million broker fee.
ITEM 8. ADDITIONAL INFORMATION
Conditions to the Offer
Notwithstanding any other provisions of the Offer
and in addition to Purchaser’s rights to extend, amend or terminate the Offer in accordance with the terms and conditions of the
Business Combination Agreement and applicable law, and in addition to the obligations of Purchaser to extend the Offer pursuant to the
terms and conditions of the Business Combination Agreement and applicable law, Purchaser is not required to accept for exchange or, subject
to any applicable rules and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act), exchange the Offer
Consideration for any shares of Eneti Common Stock validly tendered in the Offer and not validly withdrawn prior to the Expiration Date,
if at the Expiration Date any of the following conditions have not been satisfied or waived in accordance with the Business Combination
Agreement:
| · | Minimum Condition—Eneti Stockholders having validly tendered and not validly withdrawn in
accordance with the terms of the Offer and prior to the Expiration Date a number of shares of Eneti Common Stock that upon the consummation
of the Offer, together with any shares of Eneti Common Stock then owned by Purchaser, would represent at least 85.01% of the aggregate
voting power of the shares of Eneti Common Stock outstanding immediately after the consummation of the Offer; |
| · | Shareholder Approval—The Cadeler Shareholder Approval (as defined in the Business Combination
Agreement) having been granted (this condition was satisfied on July 14, 2023); |
| · | DBA Confirmation—The Danish Business Authority having provided its confirmation that the
registration of the issuance of Purchaser Shares in connection with the Offer can be made; |
| · | Regulatory Approvals— Any required authorization, permit, notification, filing, approvals,
consents, waivers or clearances under any Antitrust Laws or Foreign Investment Laws (as defined in the Business Combination Agreement)
having been obtained or made, as applicable; |
| · | No Legal Prohibition—No governmental entity of competent jurisdiction having (i) enacted,
issued or promulgated any law on or after June 16, 2023 (and there not having been any change on or after June 16, 2023 in the
manner in which any governmental entity enforces or interprets any law enacted, issued or promulgated prior to June 16, 2023) that
is in effect as of immediately prior to the Expiration Date or (ii) issued or granted any order or injunctions (whether temporary,
preliminary or permanent) that is in effect as of immediately prior to the Expiration Date, which, in each case described in the foregoing
clauses (i) and (ii), restrains, enjoins or otherwise prohibits the consummation of the Transactions; |
| · | Effectiveness of the Registration Statements—The registration statement on Form F-4,
and the registration statement to be filed on Form F-6 registering the Purchaser ADSs (together, the “Registration Statements”)
each having become effective under the Securities Act of 1933, and not being the subject of any stop order or proceeding seeking a stop
order; |
| · | Listing of Purchaser ADSs and Purchaser Shares—The Purchaser ADSs to be issued in the Offer,
and the Purchaser Shares underlying such Purchaser ADSs, having been approved for listing on the NYSE, subject to official notice of issuance,
and the Purchaser Shares to be issued in the Offer having been approved for listing on the OSE; |
| · | No Eneti Material Adverse Effect—There not having occurred any change, effect, development,
circumstance, condition, state of facts, event or occurrence since the date of the Business Combination Agreement that, individually or
in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations
of Eneti and its subsidiaries, taken as a whole an Eneti Material Adverse Effect (as defined in the Business Combination Agreement), and
that is continuing as of immediately prior to the Expiration Date; |
| · | Accuracy of Eneti’s Representations and Warranties—The representations and warranties
of Eneti in the Business Combination Agreement (without giving effect to any qualification as to materiality or Eneti Material Adverse
Effect) being true and correct as of June 16, 2023 and as of the Expiration Date as though made on and as of the Expiration Date
(except for representations and warranties that by their terms speak specifically as of another date, in which case as of such date),
except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification as
to materiality or Eneti Material Adverse Effect) have not had and would not reasonably be expected to have, individually or in the aggregate,
an Eneti Material Adverse Effect, except that (1) certain of Eneti’s representations and warranties related to its qualification,
organization and subsidiaries, its authority to enter into the Business Combination Agreement, the opinion of Eneti’s financial
advisor, anti-takeover laws and finders and brokers fees must be true and correct in all material respects, if not qualified by materiality
or Eneti Material Adverse Effect, and in all respects, if qualified by materiality or Eneti Material Adverse Effect; (2) certain
of Eneti’s representations and warranties related to its capitalization and voting agreements must be true and correct in all respects,
except for any de minimis inaccuracies; and (3) Eneti’s representation and warranty that no Eneti Material Adverse Effect has
occurred from December 31, 2022 through June 16, 2023 (the date of the Business Combination Agreement) must be true and correct
in all respects; |
| · | Eneti’s Compliance with Covenants—Eneti having performed or complied in all material
respects with the covenants and agreements required to be performed or complied with by it under the Business Combination Agreement at
or prior to the Expiration Date; |
| · | Receipt of Eneti Officer’s Certificate—Purchaser having received from Eneti a certificate,
dated the date of the Expiration Date and signed by its chief executive officer or chief financial officer, certifying to the effect that
the conditions set forth in the three bullet points immediately above have been satisfied; |
| · | No Termination of the Business Combination Agreement—The Business Combination Agreement not
having been validly terminated in accordance with its terms; or |
| · | CMA Clearance—The CMA (i) not having indicated (verbally or in writing) in response
to a briefing note that it has further questions in relation to the Transactions (which remain unanswered) and not having opened, or indicated
that it is still considering whether to open, a CMA Merger Investigation; (ii) having opened a CMA Merger Investigation and a merger
filing having subsequently been submitted, having confirmed that there will be no Phase 2 Reference; or (iii) having made a Phase
2 Reference, having confirmed that the transactions contemplated by the Business Combination Agreement are not expected to result in a
substantial lessening of competition within any market(s) in the United Kingdom for goods or services; or an IEO not having been
imposed on the parties that either restricts the management of their respective businesses pending the determination of CMA or UK Investment
Security Unit proceedings or prevents, restrains or otherwise makes illegal the consummation of the Transactions. |
Except as expressly set forth in the Business
Combination Agreement, the foregoing conditions to the Offer are for the sole benefit of Purchaser and may be asserted by Purchaser regardless
of the circumstances giving rise to any such conditions, and may be waived by Purchaser in whole or in part at any time and from time
to time in its sole and absolute discretion. However, certain specified conditions may only be waived by Purchaser with the prior written
consent of Eneti. These conditions are (i) the Cadeler Shareholder Approval having been granted (this condition was satisfied on
July 14, 2023), (ii) the receipt of the DBA confirmation that the registration of the issuance of Purchaser Shares in connection
with the Offer can be made, (iii) the receipt of required regulatory approvals, (iv) the absence of legal prohibitions, (v) the
Purchaser ADSs to be issued in the Offer, and the Purchaser Shares underlying such Purchaser ADSs, having been approved for listing on
the NYSE, subject to official notice of issuance, and the Purchaser Shares to be issued in the Offer having been approved for listing
on the OSE, (vi) the Registration Statements having become effective, (vii) the Business Combination Agreement not having been
validly terminated in accordance with its terms and (viii) CMA clearance having been achieved per the above. In addition, while Purchaser
may, in its sole and absolute discretion and without Eneti’s consent, reduce the Minimum Condition from 85.01% to a lower percentage,
Purchaser cannot, without Eneti’s prior written consent, reduce the Minimum Condition such that Purchaser would, following completion
of the Offer, hold a number of shares of Eneti Common Stock less than the number of shares required to approve the Merger in accordance
with the BCAMI (being a majority of the outstanding shares of Eneti Common Stock, or 50% plus 1 share). In determining whether to exercise
its right to reduce the Minimum Condition as described in the foregoing sentence, Purchaser will consider a number of factors, including
the overall level of support for the Offer reflected in acceptances received from Eneti Stockholders at the time of any such determination.
Shareholder Approval of the Merger
If the Offer is consummated in accordance with
its terms, then, as the second step in the Business Combination, it is Purchaser’s intention to acquire all of the outstanding shares
of Eneti Common Stock as promptly as practicable thereafter through the consummation of a Merger of Merger Sub with and into Eneti, with
Merger Sub surviving the Merger. The purpose of the Merger is for Purchaser to acquire all remaining shares of Eneti Common Stock that
it did not acquire in the Offer. In accordance with the Company’s Articles of Incorporation and the BCAMI, the Eneti Stockholders
as of the record date for the Merger will vote on the Merger at a duly noticed special meeting of shareholders. In accordance with the
Company’s Articles of Incorporation, the approval of a majority of all issued and outstanding shares of Eneti is required to approve
the Merger. It is expected that following the Offer, Purchaser will have a sufficient number of shares of Eneti Common Stock to approve
the Merger at the special meeting.
Upon the consummation of the Merger, the Eneti
business will be held by a wholly owned subsidiary of Purchaser, and Eneti Stockholders will no longer have any direct ownership interest
in the Eneti business (though those Eneti Stockholders who accept the Offer and tender their shares of Eneti Common Stock to Purchaser
pursuant to the Offer will continue to have an indirect ownership interest in the Eneti business through their ownership interest in Purchaser).
Appraisal Rights
No appraisal rights are available to Eneti Stockholders
in connection with the Offer, and no appraisal rights are expected to be available to Eneti Stockholders in connection with the Merger
because it is assumed that Eneti will remain listed on NYSE at least through the record date for the Merger. Under Section 100 of
the BCAMI, Eneti Stockholders will not be entitled to seek appraisal if, at the record date fixed to determine the shareholders entitled
to receive notice of and to vote at the meeting of shareholders called to vote upon the agreement of Merger, Eneti Common Stock is either
(i) listed on a securities exchange or admitted to trading on an interdealer quotation system or (ii) held of record by more
than 2,000 holders. Eneti Common Stock is currently listed on NYSE and it is presently expected that Eneti Common Stock will remain listed
on NYSE at least through the record date for the Merger. Eneti Stockholders are not, therefore, expected to have appraisal rights in connection
with the Merger.
If (i) the number of Eneti Common Stock purchased
in the Offer is such that the non-tendered Eneti Common Stock no longer meets the requirements for continued listing and is delisted from
NYSE on or prior to the record date for the Merger and (ii) there are fewer than 2,000 record holders of Eneti Common Stock on such
date, then Eneti Stockholders who (1) did not tender shares of Eneti Common Stock in the Offer; (2) follow the procedures set
forth in Section 101 of the BCAMI; and (3) do not thereafter withdraw their demand for appraisal of such shares or otherwise
lose their appraisal rights, in each case in accordance with the BCAMI, will be entitled to have their shares of Eneti Common Stock appraised
by the High Court of the Republic of the Marshall Islands and receive payment of the “fair value” of such shares, excluding
any appreciation or depreciation directly or indirectly induced by the Merger or its proposal. The “fair value” of any shares
of Eneti Common Stock could be based upon considerations other than, or in addition to, the price paid in the Merger and the market value
of such shares. Eneti Stockholders should recognize that the value so determined could be higher or lower than the consideration payable
in the Merger. Moreover, Purchaser and Eneti may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value
of such shares is less than such amount.
Legal Proceedings
As of the date of this Schedule 14D-9, Eneti is
not aware of any pending legal proceedings relating to the Offer.
Regulatory Approvals
Merger Notification Requirements
The Transactions may be subject to a filing with
the CMA in the United Kingdom. On July 8, 2023, the parties submitted a briefing paper to the CMA and requested that the CMA confirm
that it has no further questions in respect of the Transactions. On September 14, 2023, the CMA confirmed that it requires no further
information on the Transactions and does not currently intend to open a formal investigation of the Transactions at this stage. It is
Purchaser’s expectation that no such formal investigation will be forthcoming and that the relevant condition to the Offer will
be satisfied.
Foreign Investment Screening Considerations
In connection with the Business Combination and
upon completion of the Offer, all Eneti Stockholders accepting the Offer will become holders of Purchaser ADSs representing Purchaser
Shares. Thus, under the Danish Act on Screening of Certain Foreign Direct Investments, Purchaser will have new foreign investors, where
one foreign investor, SHL, is expected to indirectly hold and control approximately 11.5% of the share capital and voting rights of Purchaser,
assuming all Eneti Stockholders tender their shares. To complete the Business Combination pursuant to the terms of the Business Combination
Agreement, SHL made a filing with the DBA to obtain authorizations, approvals or consents pursuant to the Danish Act on Screening of Certain
Foreign Direct Investments.
On August 4, 2023, SHL received foreign direct
investment approval from the DBA pursuant to the Danish Act on Screening of Certain Foreign Direct Investments with regard to the ownership
by SHL and partly held through Scorpio Services Holding Limited of more than 10% of all outstanding Purchaser Shares in the form of Purchaser
ADSs following completion of the Offer.
Cautionary Note Regarding Forward-Looking Statements
This Schedule 14D-9 contains or incorporates by
reference statements forward-looking statements regarding management’s future expectations, beliefs, intentions,
goals, strategies, plans or prospects. Forward-looking statements include but are not limited to those using words such
as “expect”, “anticipate”, “believe”, “estimate”, “intend”, “project”,
“plan”, “strategy”, “forecast” and similar expressions or future or conditional verbs such as “if”,
“will”, “would”, “should”, “could”, “may” and “might”. These statements
reflect the Company’s current expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light
of currently available information. Such forward-looking statements are not guarantees of future performance or events
and involve known and unknown risks and uncertainties. These forward-looking statements are subject to risks and uncertainties
including, among other things, satisfaction or waiver of the conditions precedent set forth in the Business Combination Agreement, including
uncertainties as to whether and how many Eneti Stockholders will tender their shares of Eneti Common Stock into the Offer and the possibility
that the transactions contemplated by the Business Combination Agreement are not consummated; disruption from the announced Offer by Purchaser
making it more difficult to maintain business and operational relationships and significant transaction costs. Accordingly, actual results
may differ materially from those described in such forward-looking statements. Shareholders should not place undue reliance
on such forward-looking statements, and the Company undertakes no obligation to update publicly or revise any forward-looking statements,
subject to compliance with all applicable laws and regulations and/or the rules of NYSE and/or any other regulatory or supervisory
body or agency. A further description of risks and uncertainties relating to the Company can be found in the Company’s Annual Report
on Form 20-F for the fiscal year ended December 31, 2022 filed with the SEC on April 14, 2023, and in the subsequent interim
financial information included in the Company’s Report on Form 6-K furnished to the SEC on September 21, 2023, both of
which are incorporated herein by reference and available for free at the SEC’s website at www.sec.gov. Copies of these documents
are also available free of charge on the Company’s internet website at eneti-inc.com/sec-filings.
ITEM 9. EXHIBITS
Exhibit No. |
|
Description |
(a)(1)(i) |
|
Form of Letter of Transmittal (incorporated by reference to Exhibit 99.1 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023) |
|
|
|
(a)(1)(ii) |
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit 99.2 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023) |
|
|
|
(a)(1)(iii) |
|
Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit 99.3 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023) |
|
|
|
(a)(2) |
|
Tender Offer Statement of Cadeler (incorporated herein by reference to Schedule TO filed by Cadeler on November 7, 2023). |
|
|
|
(a)(4) |
|
Prospectus/Offer to Exchange (incorporated herein by reference to Prospectus filed by Cadeler on November 7, 2023 pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended. |
|
|
|
(a)(5)(i) |
|
Communication by Eneti in relation to the signing of the business combination agreement, dated as of June 16, 2023 (incorporated by reference to Eneti’s Current Report on Form 6-K filed on June 16, 2023). |
|
|
|
(a)(5)(ii) |
|
Joint press release by Cadeler and Eneti in relation to the signing of the business combination agreement, dated as of June 16, 2023 (incorporated by reference to Eneti’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(iii) |
|
Investor Presentation, dated as of June 16, 2023 (incorporated by reference to Eneti’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(iv) |
|
Form of Summary Advertisement (incorporated herein by reference to Exhibit (a)(5)(O) to Schedule TO filed by Cadeler on November 7, 2023). |
|
|
|
(a)(5)(v) |
|
Opinion of Perella Weinberg Partners LP (included as Annex A to this Schedule 14D-9). |
|
|
|
(a)(5)(vi) |
|
Communication by Cadeler in relation to the announcement of the business combination agreement, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(vii) |
|
Announcement of business combination agreement, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(viii) |
|
Communication by Cadeler and Eneti in relation to the signing of the business combination agreement, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(ix) |
|
Notice of upcoming webcast presenting the combination of Cadeler and Eneti, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(x) |
|
Press release regarding the combination of Cadeler and Eneti, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(xi) |
|
Communication by Cadeler regarding the combination of Cadeler and Eneti, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
|
|
|
(a)(5)(xii) |
|
Certain announcements by Cadeler in relation to the combination of Cadeler and Eneti, dated as of June 16, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 16, 2023). |
Exhibit No. |
|
Description |
(a)(5)(xiii) |
|
Announcement by Cadeler regarding a notice convening an extraordinary general meeting of Cadeler, dated as of June 21, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 21, 2023). |
|
|
|
(a)(5)(xiv) |
|
Notice convening an extraordinary general meeting of Cadeler, dated as of June 21, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on June 21, 2023). |
|
|
|
(a)(5)(xv) |
|
Announcement by Cadeler of the results of the extraordinary general meeting held on July 14, 2023, dated as of July 14, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on July 14, 2023). |
|
|
|
(a)(5)(xvi) |
|
Announcement by Cadeler of the filing of Form F-4 with the SEC, dated as of October 19, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on October 20, 2023). |
|
|
|
(a)(5)(xvii) |
|
Stock exchange announcement by Cadeler of the commencement of the Offer, dated as of November 7, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on November 7, 2023). |
|
|
|
(a)(5)(xviii) |
|
Press release by Cadeler related to the commencement of the Offer, dated as of November 7, 2023 (incorporated by reference to Cadeler’s filing pursuant to Rule 425 on November 7, 2023). |
|
|
|
(e)(1) |
|
Business Combination Agreement, dated as of June 16, 2023, by and between Cadeler and Eneti (incorporated by reference to Exhibit 2.1 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(2) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Scorpio Holdings Limited (incorporated by reference to Exhibit 10.5 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(3) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Scorpio Services Holding Limited (incorporated by reference to Exhibit 10.6 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(4) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Robert Bugbee (incorporated by reference to Exhibit 10.7 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(5) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Roberto Giorgi (incorporated by reference to Exhibit 10.8 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(6) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Christian M. Gut (incorporated by reference to Exhibit 10.9 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(7) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Berit Ledel Henriksen (incorporated by reference to Exhibit 10.10 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(8) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Emanuele A. Lauro (incorporated by reference to Exhibit 10.11 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(9) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and James B. Nish (incorporated by reference to Exhibit 10.12 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(10) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Einar Michael Steimler (incorporated by reference to Exhibit 10.13 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(11) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Aileen Tan (incorporated by reference to Exhibit 10.14 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(12) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Hugh Baker (incorporated by reference to Exhibit 10.15 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
|
|
|
(e)(13) |
|
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Filippo Lauro (incorporated by reference to Exhibit 10.16 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
Exhibit No. | |
Description |
(e)(14) | |
Tender and Support Agreement, dated as of June 16, 2023, entered into by and among, Cadeler and Cameron Mackey (incorporated by reference to Exhibit 10.17 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
| |
|
(e)(15) | |
Confidentiality Agreement, dated February 1, 2023, by and between Cadeler and Eneti (incorporated by reference to Exhibit 99.5 to Cadeler’s Registration Statement on Form F-4 filed on October 31, 2023). |
| |
|
(e)(16) | |
2013 Equity Incentive Plan (incorporated by reference to Exhibit 4.3 to Eneti’s Annual Report on Form 20-F filed on April 14, 2023). |
| |
|
(e)(17) | |
Master Agreement, dated September 27, 2013, entered into by and among, Eneti, SSM and SCM (incorporated by reference to Exhibit 4.1 to Eneti’s Annual Report on Form 20-F filed on April 14, 2023). |
| |
|
(e)(18) | |
Administrative Services Agreement, dated September 27, 2013, entered into by and among, Eneti and SSH (incorporated by reference to Exhibit 4.2 to Eneti’s Annual Report on Form 20-F filed April 14, 2023). |
ANNEX A
OPINION OF ENETI’S FINANCIAL
ADVISOR
|
767 Fifth Avenue |
New York, NY 10153 |
T 212.287.3200 |
F 212.287.3201 |
pwpartners.com |
June 15, 2023
The Board of Directors
Eneti Inc.
Le Millenium
9 Boulevard Charles III
MC 98000
Monaco
Members of the Board:
We
understand that Eneti Inc. (the “Company”) and Cadeler A/S (“Parent”) propose to enter into a
Business Combination Agreement (the “Business Combination Agreement”) pursuant to which, among other things,
(i) Parent will commence an exchange offer (the “Offer”) to acquire any and all of the issued and
outstanding shares of common stock, $0.01 par value per share, of the Company (the “Company Common Stock”)
whereby each share of Company Common Stock will be exchanged for American Depositary Shares of Parent (each such share, a
“Parent ADS”) representing, in the aggregate, 3.409 shares (the “Exchange Ratio”) of common
stock, with a nominal value of DKK 1 per share, of Parent (each such share, a “Parent Share”) without interest
(the “Offer Consideration”), and Parent may permit each holder of Company Common Stock the option to elect to
receive the Offer Consideration in the form of Parent Shares in lieu of Parent ADSs, and (ii) following the consummation of the
Offer, the Company will be merged into a wholly owned subsidiary of Parent (“Merger Sub”) with Merger Sub
surviving the merger as a wholly owned subsidiary of Parent (the “Merger” and, together with the Offer, the
“Transactions”). The terms and conditions of the Transactions are more fully set forth in the Business
Combination Agreement.
You have requested
our opinion as to the fairness from a financial point of view to the holders of outstanding shares of Company Common Stock of the Exchange
Ratio in the proposed Offer pursuant to the Business Combination Agreement.
For purposes of the opinion set forth herein,
we have, among other things:
| 1. | reviewed certain publicly available financial statements and other publicly available business and financial information with respect
to the Company and Parent, including equity research analyst reports; |
| 2. | reviewed certain internal financial statements, analyses and forecasts (the “Company Forecasts”) and other internal
financial information and operating data relating to the business of the Company, in each case, prepared by management of the Company
and approved for our use by management of the Company; |
| 3. | reviewed certain internal financial statements, analyses and forecasts (the “Parent Forecasts”) and other internal
financial information and operating data relating to the business of Parent, in each case, prepared by management of Parent
and approved for our use by management of the Company; |
| 4. | discussed the past and current business, operations, financial condition and prospects of the Company and the combined company with
senior management of the Company, the Board of Directors of the Company, and other representatives and advisors of the Company; |
| 5. | discussed the past and current business, operations, financial condition and prospects of Parent and the combined company with senior
executives of the Company and Parent, the Board of Directors of the Company, and other representatives and advisors of the Company and
Parent; |
| 6. | discussed with members of the senior managements of the Company and Parent their assessment of the strategic rationale for, and the
potential benefits of, the Transactions; |
| 7. | reviewed certain estimates as to the amount and timing of certain cost savings and related expenses, operating efficiencies, revenue
effects and financial synergies anticipated by management of Parent and the Company to result from the consummation of the Transactions
(the “Synergies”) as approved for our use by the management of the Company; |
| 8. | reviewed the historical trading prices and trading activity for the Company Common Stock and the Parent Shares; |
| 9. | participated in discussions among representatives of the Company and Parent and their respective advisors; |
| 10. | reviewed a draft of the Business Combination Agreement dated June 15, 2023; and |
| 11. | conducted such other financial studies, analyses and investigations, and considered such other factors, as we have deemed appropriate. |
For
purposes of our opinion, we have assumed and relied upon, without assuming any responsibility for independent verification, the
accuracy and completeness of all of the financial, accounting, legal, tax, regulatory and other information provided to, discussed
with or reviewed by us (including information that was available from public sources) and have further relied upon the assurances of
management of the Company that they are not aware of any facts or circumstances that would make such information inaccurate or
misleading in any material respect. With respect to the Company Forecasts and the Synergies, we have been advised by management of
the Company and have assumed, with your consent, that they have been reasonably prepared on bases reflecting the best currently
available estimates and good faith judgments of management of the Company as to the future financial performance of the Company and
the combined company, as applicable, and the other matters covered thereby and we express no view as to the reasonableness of the
Company Forecasts or the Synergies or the assumptions on which they are based. With respect to the Parent Forecasts, we have been
advised by management of the Company and have assumed, with your consent, that they have been reasonably prepared on bases
reflecting the best currently available estimates and good faith judgments of management of Parent as to the future financial
performance of Parent and the other matters covered thereby and we express no view as to the reasonableness of the Parent Forecasts
or the assumptions on which they are based. We have also assumed, with your consent, that the financial results reflected in the
Synergies will be realized in the amounts and at the times projected. In arriving at our opinion, we have not made or been provided
with any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet
assets or liabilities) of the Company, Parent or any of their respective subsidiaries (other than certain third-party vessel
valuation reports). We have not assumed any obligation to conduct, nor have we conducted, any physical inspection of the properties
or facilities of the Company, Parent or any other party. In addition, we have not evaluated the solvency of any party to the
Business Combination Agreement, or the impact of the Transactions thereon, including under any applicable laws relating to
bankruptcy, insolvency or similar matters.
We have assumed that
the final Business Combination Agreement will not differ from the draft of the Business Combination Agreement reviewed by us in any respect
material to our analysis or this opinion.
We
have also assumed that (i) the representations and warranties of all parties to the Business Combination Agreement and all
other related documents and instruments that are referred to therein are true and correct in all respects material to our analysis
and this opinion, (ii) each party to the Business Combination Agreement and such other related documents and instruments will
fully and timely perform all of the covenants and agreements required to be performed by such party in all respects material to our
analysis and this opinion, and (iii) the Transactions will be consummated in a timely manner in accordance with the terms set
forth in the Business Combination Agreement, without any modification, amendment, waiver or delay that would be material to our
analysis or this opinion. We have also assumed that the Offer and the Merger, taken together as a single integrated transaction,
will qualify as a “reorganization” within the meaning of Section 368(a) of the U.S. Internal Revenue Code of
1986, as amended. In addition, we have assumed that in connection with the receipt of all approvals and consents required in
connection with the proposed Transactions, no delays, limitations, conditions or restrictions will be imposed that would be material
to our analysis.
This
opinion addresses only the fairness from a financial point of view, as of the date hereof, of the Exchange Ratio in the proposed
Offer pursuant to the Business Combination Agreement. We have not been asked to, nor do we, offer any opinion as to any other term
of the Business Combination Agreement (including the consideration to be received by holders of Company Common Stock in the Merger)
or any other document contemplated by or entered into in connection with the Business Combination Agreement, the form or structure
of the Transactions or the likely timeframe in which the Transactions will be consummated. Nor do we express any opinion with
respect to the relative fairness of the Offer Consideration to be received by holders of Company Common Stock in the Offer as
compared to the consideration to be received by holders of Company Common Stock in the Merger. In addition, we express no opinion as
to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any party to
the Business Combination Agreement, or any class of such persons, whether relative to the Exchange Ratio, the Offer Consideration or
otherwise. We express no opinion as to the fairness of the Transactions to the holders of any other class of securities, creditors
or other constituencies of the Company, as to the underlying decision by the Company to engage in the Transactions or as to the
relative merits of the Transactions compared with any alternative transactions or business strategies. Nor do we express any opinion
as to any tax or other consequences that may result from the transactions contemplated by the Business Combination Agreement or any
other related document, although we have assumed with your consent for purposes of our analysis that the Transactions will receive
the tax treatment contemplated by the Business Combination Agreement. This opinion does not address any legal, tax, regulatory or
accounting matters, as to which we understand the Company has received such advice as it deems necessary from qualified
professionals.
We were not requested
to, and we did not, solicit third party indications of interest in the possible acquisition of all or part of the Company, nor were we
requested to consider, and our opinion does not address, the underlying business decision by the Company to engage in the Transactions
or the relative merits of the Transactions as compared with any alternative transactions or business strategies.
We have acted as financial
advisor to the Company with respect to the Transactions and this opinion and will receive a fee for our services, a portion of which becomes
payable upon delivery of this opinion (or would have become payable if we had advised the Company that we were unable to render this opinion)
and a substantial portion of which is contingent upon consummation of the Transactions. In addition, the Company has agreed to reimburse
us for certain expenses and indemnify us for certain liabilities that may arise out of our engagement.
Perella
Weinberg Partners LP and its affiliates, as part of their investment banking business, are regularly engaged in performing financial
analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well
as for estate, corporate and other purposes. We and our affiliates also engage in securities trading and brokerage, asset management
activities, equity research and other financial services. In the two years preceding the date of this letter, we and our affiliates
have provided investment banking services to affiliates of the Company on matters unrelated to the Transactions for which we or such
affiliates received compensation, including serving as financial advisor to Hermitage Offshore Services Ltd. in connection with a
financial restructuring. Except in connection with our engagement as financial advisor to the Company in connection with the
Transactions, and as stated in the immediately preceding sentence, during the two-year period prior to the date hereof, no material
relationship existed between Perella Weinberg Partners LP or its affiliates, on the one hand, and Parent, the Company or any of
their respective affiliates pursuant to which we or our affiliates has received or anticipates receiving compensation. However, we
and our affiliates in the future may provide investment banking and other financial services to Parent and/or the Company and their
respective affiliates and in the future may receive compensation for the rendering of these services. In the ordinary course of our
business activities, we and our affiliates may at any time hold long or short positions, and may trade or otherwise effect
transactions, for our own account or the accounts of customers or clients, in (i) debt, equity or other securities (or related
derivative securities) or financial instruments (including bank loans or other obligations) of the Company, Parent or any of their
respective affiliates and (ii) any currency or commodity that may be material to the parties or otherwise involved in the
Transactions. The issuance of this opinion was approved by a fairness opinion committee of Perella Weinberg Partners LP.
This
opinion and our advisory services are for the information and assistance of the Board of Directors of the Company in connection
with, and for the purpose of its evaluation of, the Transactions. This opinion is not intended to be and does not constitute a
recommendation to any holder of Company Common Stock as to whether or not to exchange shares pursuant to the Offer or how such
holder should vote or otherwise act with respect to the proposed Transactions or any other matter. We express no opinion as to what
the value of the Parent ADSs or the Parent Shares actually will be when issued or the prices at which the Company Common Stock, the
Parent ADSs or the Parent Shares will trade at any time, including following announcement or completion of the Offer or the Merger.
In addition, we express no opinion as to the fairness of the Transactions to, or any consideration received in connection with the
Transactions by the holders of any other class of securities, creditors or other constituencies of the Company. Our opinion is
necessarily based on financial, economic, market, monetary and other conditions as in effect on, and the information made available
to us as of, the date hereof. Subsequent developments may affect this opinion and the assumptions used in preparing it, and we do
not have any obligation to update, revise, or reaffirm this opinion.
Based upon and subject
to the foregoing, including the various assumptions and limitations set forth herein, we are of the opinion that, as of the date hereof,
the Exchange Ratio in the proposed Offer pursuant to the Business Combination Agreement is fair, from a financial point of view, to the
holders of Company Common Stock.
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Very truly yours, |
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/s/ Perella Weinberg
Partners LP |
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PERELLA WEINBERG PARTNERS
LP |
SIGNATURE
After due inquiry and to
the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
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Eneti Inc. |
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By: |
/s/ Emanuele Lauro |
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Name: |
Emanuele Lauro |
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Title: |
Chief Executive Officer |
Dated: November 7, 2023
Eneti (NYSE:NETI)
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