SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT
under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934
(Amendment No. 1)
TRANSOCEAN INC.
(Name of Subject Company (issuer))
TRANSOCEAN INC.
(Names of Filing Persons (offerors))
ZERO COUPON CONVERTIBLE DEBENTURES DUE MAY 24, 2020
(Title of Class of Securities)
893830 AA 7
(CUSIP Number of Class of Securities)
ERIC B. BROWN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
TRANSOCEAN INC.
4 GREENWAY PLAZA
HOUSTON, TEXAS 77046
(713) 232-7500
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copy to:
GENE J. OSHMAN, ESQ.
JOHN D. GEDDES, ESQ.
BAKER BOTTS L.L.P.
ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002-4995
(713) 229-1234
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing registration statement
number, or the Form or Schedule and the date of its filing.
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
[ ] Check the appropriate boxes below to designate any transactions to which
the statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
Transocean Inc., a Cayman Islands company ("Transocean"), hereby amends its
Tender Offer Statement on Schedule TO (the "Schedule TO") originally filed on
April 25, 2003 relating to the offer by the Company to repurchase all
outstanding Zero Coupon Convertible Debentures Due May 24, 2020 issued by
Transocean on May 24, 2000 as described in the Schedule TO. Items 1, 2, 4, 10
and 11 of the Schedule TO are hereby amended to read in their entirety as
follows:
ITEM 1. Summary Term Sheet.
The following are answers to some of the questions that you may have about
our offer to repurchase your debentures as described in this document. We refer
to this offer as the "Offer." To understand the Offer fully and for a more
complete description of the terms of the Offer, we urge you to carefully read
the remainder of this document and the accompanying company notice because the
information in this summary is not complete and the remainder of this document
and the notice contain additional important information.
- WHO IS OFFERING TO REPURCHASE MY DEBENTURES?
We are Transocean Inc., a Cayman Islands company, and we are offering to
repurchase all outstanding Zero Coupon Convertible Debentures Due May 24, 2020
issued by us on May 24, 2000. We issued the debentures under an Indenture,
dated as of April 15, 1997, as supplemented, between us and The Bank of New York
(as successor trustee to Chase Bank of Texas, National Association), as trustee.
As of April 24, 2003, there was $865,000,000 aggregate principal amount of
debentures outstanding.
- WHY ARE YOU MAKING THE OFFER?
We are required to make the Offer under the terms of the debentures and the
indenture.
- HOW MUCH ARE YOU OFFERING TO PAY?
Each holder of the debentures may require us to repurchase its debentures
at a repurchase price of $628.57 per $1,000 principal amount.
- WHAT IS THE FORM OF PAYMENT?
Under the terms of the debentures, we may pay the repurchase price in cash,
ordinary shares or any combination thereof. We have determined that, if any
holders of debentures require us to repurchase any debentures, we will pay the
repurchase price in cash.
- ARE THE DEBENTURES CONVERTIBLE INTO ORDINARY SHARES?
Yes. Each debenture is convertible at any time, at the option of the
holder, into Transocean's ordinary shares at a conversion rate of 8.1566
ordinary shares per $1,000 principal amount. This conversion rate is subject to
adjustment in certain events.
- HOW CAN I DETERMINE THE MARKET VALUE OF THE DEBENTURES?
There is no established reporting system or market for trading in the
debentures. To the extent that the debentures are traded, prices of the
debentures may fluctuate widely depending on trading volume, the balance between
buy and sell orders, prevailing interest rates, the market price of our ordinary
shares, our business, financial condition and operating results and the market
for similar securities. Holders are urged to obtain current market quotations
to the extent available for the debentures prior to making any decision with
respect to the Offer.
- WHAT DOES YOUR BOARD OF DIRECTORS THINK OF THE OFFER?
Although our board of directors has approved the terms of the Offer
included in the indenture, the board has not made any recommendation as to
whether you should accept the Offer and surrender your debentures for
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repurchase. You must make your own decision whether to accept the Offer and
surrender your debentures for repurchase and, if so, the number of debentures
you elect to have repurchased.
- WHEN DOES THE OFFER EXPIRE?
The Offer expires at 10:00 a.m., New York City time, on May 27, 2003.
Although the indenture provides that we are required to repurchase debentures if
the holder of the debentures delivers notice before the close of business on May
24, 2003, because that date falls on a Saturday, we have extended the deadline
for accepting the Offer to allow holders additional time to accept the Offer.
For purposes of the indenture, if you accept the Offer and do not withdraw your
acceptance before the expiration of the Offer, we will treat your acceptance and
the repurchase as having been made as of May 24, 2003.
We do not expect to otherwise extend the period you have to accept the
Offer. However, we reserve the right, in our sole discretion, to provide a
subsequent repurchase period of between three and 20 business days to allow
additional time for holders to accept the Offer. If a subsequent repurchase
period is provided, all repurchase notices delivered and debentures surrendered
prior to the initial expiration of the Offer and not withdrawn will be accepted
and promptly paid, and we will make a public announcement of the subsequent
repurchase period no later than 9:00 a.m., New York City time, on May 28, 2003.
Unless otherwise provided in the announcement of the subsequent repurchase
period, all repurchase notices delivered and debentures surrendered during the
subsequent repurchase period will be promptly accepted and paid. Unless
otherwise provided in the announcement of the subsequent repurchase period,
holders will not have the right to withdraw repurchase notices delivered and
debentures surrendered during the subsequent repurchase period.
- WHAT ARE THE CONDITIONS TO YOUR REPURCHASE OF THE DEBENTURES?
As long as our repurchase of validly surrendered debentures is not
unlawful, that repurchase will not be subject to any other conditions.
- HOW DO I ACCEPT THE OFFER?
You may accept the Offer prior to its expiration as follows:
- Holders who are participants in The Depository Trust Company should
accept the Offer electronically through DTC's Automated Tenders over
the Participant Terminal System, subject to the terms and procedures
of that system. Holders accepting the Offer through DTC need not
submit a physical repurchase notice to the paying agent if those
holders comply with DTC's procedures.
- Holders whose debentures are held by a broker, dealer, commercial
bank, trust company or other nominee must contact that nominee if
those holders desire to accept the Offer and instruct that nominee to
accept the Offer on the holders' behalf.
- Holders whose debentures are held directly and not through DTC or a
nominee must deliver a written notice of repurchase, in the form
attached to the company notice delivered with this document, to The
Bank of New York, as paying agent.
- HOW DO I SURRENDER MY DEBENTURES?
After validly accepting the Offer, you may surrender your debentures for
repurchase pursuant to the Offer by delivering the required documents to The
Bank of New York, as paying agent, prior to, on or after May 24, 2003, as
follows:
- Holders who are participants in The Depository Trust Company should
surrender their debentures electronically through DTC's Automated
Tenders over the Participant Terminal System, subject to the terms and
procedures of that system.
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- Holders whose debentures are held by a broker, dealer, commercial
bank, trust company or other nominee must contact that nominee if
those holders desire to surrender their debentures and instruct that
nominee to surrender the debentures on the holders' behalf.
- Holders whose debentures are held directly and not through DTC or a
nominee must surrender their debentures together with all necessary
endorsements to The Bank of New York, as paying agent.
You will not receive payment for your debentures until you surrender them
to the paying agent.
DEBENTURES AND THE REPURCHASE NOTICE MUST BE DELIVERED TO THE PAYING AGENT
TO COLLECT PAYMENT. DELIVERY OF DOCUMENTS TO DTC OR TRANSOCEAN DOES NOT
CONSTITUTE DELIVERY TO THE PAYING AGENT.
- IF I ACCEPT THE OFFER, WHEN WILL I RECEIVE PAYMENT FOR MY DEBENTURES?
We will forward to the paying agent, prior to 11:00 a.m., New York City
time, on May 27, 2003, the appropriate amount of cash required to pay the total
repurchase price for the debentures to be repurchased pursuant to the Offer, and
the paying agent will promptly distribute the cash to the holders, subject to
receipt of the surrendered debentures.
- UNTIL WHAT TIME CAN I WITHDRAW A PREVIOUSLY DELIVERED REPURCHASE NOTICE?
You can withdraw a previously delivered repurchase notice at any time until
expiration of the Offer at 10:00 a.m., New York City time, on May 27, 2003.
- HOW DO I WITHDRAW A PREVIOUSLY DELIVERED REPURCHASE NOTICE AND ANY
PREVIOUSLY SURRENDERED DEBENTURES?
You may withdraw a previously delivered repurchase notice and any
previously surrendered debentures as follows:
- Holders who are participants in The Depository Trust Company should
withdraw a previously delivered repurchase notice and any previously
surrendered debentures electronically through DTC's Automated Tenders
over the Participant Terminal System, subject to the terms and
procedures of that system. Holders withdrawing a previously delivered
repurchase notice and any previously surrendered debentures through
DTC need not submit a written notice of withdrawal to the paying agent
if those holders comply with DTC's procedures.
- Holders whose debentures are held by a broker, dealer, commercial
bank, trust company or other nominee must contact that nominee if
those holders desire to withdraw a previously delivered repurchase
notice and any previously surrendered debentures and instruct that
nominee to withdraw a previously delivered repurchase notice and any
previously surrendered debentures on the holders' behalf.
- Holders whose debentures are held directly and not through DTC or a
nominee must deliver a written notice of withdrawal to The Bank of New
York, as paying agent, stating the certificate number of the
debentures being withdrawn, the principal amount of the debentures
being withdrawn and the principal amount, if any, of the debentures
that remain subject to the previously delivered repurchase notice and
which has been or will be delivered for repurchase by Transocean.
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- DO I NEED TO DO ANYTHING IF I DO NOT WISH TO ACCEPT THE OFFER AND
SURRENDER MY DEBENTURES FOR REPURCHASE?
No. If you do not deliver a properly completed and duly executed
repurchase notice to the paying agent before the expiration of the Offer, we
will not repurchase your debentures and such debentures will remain outstanding
subject to their existing terms.
- IF I CHOOSE TO ACCEPT THE OFFER, DO I HAVE TO SURRENDER ALL OF MY
DEBENTURES FOR REPURCHASE?
No. You may accept the Offer and surrender all of your debentures or a
portion of your debentures for repurchase. If you wish to accept the Offer and
surrender a portion of your debentures for repurchase, however, you must
surrender your debentures in a principal amount of $1,000 or an integral
multiple of $1,000.
- IF I DO NOT ACCEPT THE OFFER AND SURRENDER MY DEBENTURES FOR REPURCHASE,
WILL I CONTINUE TO BE ABLE TO EXERCISE MY CONVERSION RIGHTS?
Yes. If you do not accept the Offer and surrender your debentures for
repurchase, your conversion rights will not be affected.
- IF I AM A U.S. RESIDENT FOR U.S. FEDERAL INCOME TAX PURPOSES, WILL I HAVE
TO PAY TAXES IF I ACCEPT THE OFFER AND SURRENDER MY DEBENTURES FOR REPURCHASE
PURSUANT TO THE OFFER?
The receipt of cash in exchange for debentures pursuant to the Offer will
be a taxable transaction for U.S. federal income tax purposes. You should
consult with your tax advisor regarding the actual tax consequences to you.
- WHO IS THE PAYING AGENT?
The Bank of New York, the trustee for the debentures, is serving as paying
agent in connection with the Offer. Its address and telephone number are set
forth in the company notice delivered with this document.
- WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
Questions and requests for assistance in connection with the Offer and the
surrender of debentures for repurchase pursuant to the Offer may be directed to
William Buckley at The Bank of New York at (212) 815-5788.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) Name and Address. Transocean Inc. is a Cayman Islands company.
The address of Transocean's principal executive offices is 4 Greenway Plaza,
Houston, Texas 77046. Transocean's telephone number at these offices is (713)
232-7500.
(b) Securities. The securities subject to this Schedule TO and to the
transaction described in the response to paragraph (a) of Item 4 below are all
outstanding Zero Coupon Convertible Debentures Due May 24, 2020 of Transocean.
As of April 24, 2003, there was $865,000,000 aggregate principal amount of
debentures outstanding.
(c) Trading Market and Price. There is no established reporting system
or market for trading in the debentures. To the extent that the debentures are
traded, prices of the debentures may fluctuate widely depending on trading
volume, the balance between buy and sell orders, prevailing interest rates, the
market price of Transocean's ordinary shares, Transocean's business, financial
condition and operating results and the market for similar securities. The
debentures are held through DTC, and Cede & Co., as nominee of DTC, is the sole
record holder of the debentures.
Each debenture is convertible at any time, at the option of the holder,
into Transocean's ordinary shares at a conversion rate of 8.1566 ordinary shares
per $1,000 principal amount. This conversion rate is subject to adjustment in
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certain events. Transocean's ordinary shares are listed on the New York Stock
Exchange under the symbol "RIG." The following table presents the range of high
and low quarterly sales prices of Transocean's ordinary shares on the NYSE since
January 1, 2001.
PRICE
--------------
HIGH LOW
------ ------
2001
First Quarter . . . . . . . . . . . . $54.50 $40.00
Second Quarter. . . . . . . . . . . . 57.69 40.35
Third Quarter . . . . . . . . . . . . 41.98 23.05
Fourth Quarter. . . . . . . . . . . . 34.22 24.20
2002
First Quarter . . . . . . . . . . . . 34.66 26.51
Second Quarter. . . . . . . . . . . . 39.33 30.00
Third Quarter . . . . . . . . . . . . 31.75 19.60
Fourth Quarter. . . . . . . . . . . . 25.89 18.10
2003
First Quarter . . . . . . . . . . . . 24.36 19.87
Second Quarter (through May 12, 2003) 21.07 18.40
On May 12, 2003, the last reported sales price of Transocean's ordinary
shares on the NYSE was $20.13 per share. As of May 12, 2003, there were
319,776,740 shares outstanding. We urge you to obtain current market information
for the debentures, to the extent available, and the ordinary shares before
making any decision to surrender your debentures pursuant to the Offer.
ITEM 4. TERMS OF THE TRANSACTION.
(a) Material Terms.
GENERAL
The securities subject to this Schedule TO and to the transaction described
in this document are Transocean's Zero Coupon Convertible Debentures Due May 24,
2020. See response to paragraph (b) of Item 2 above. Transocean issued the
debentures under an Indenture dated as of April 15, 1997 between Transocean and
The Bank of New York (as successor trustee to Chase Bank of Texas, National
Association), as trustee, as amended and supplemented by the First Supplemental
Indenture thereto dated as of April 15, 1997, the Second Supplemental Indenture
thereto dated as of May 14, 1999, the Third Supplemental Indenture thereto dated
as of May 24, 2000 and the Fourth Supplemental Indenture thereto dated May 11,
2001. The description of the debentures and the indenture set forth under the
caption "Description of Debentures" in Transocean's prospectus supplement dated
May 19, 2000 to the prospectus dated November 12, 1999 and under the caption
"Description of Debt Securities" in that prospectus is incorporated by reference
in this Schedule TO.
Under the indenture, each holder of the debentures may require Transocean
to repurchase that holder's debentures as of May 24, 2003 at a repurchase price
of $628.57 per $1,000 principal amount. Transocean will pay the repurchase
price in cash with respect to any and all debentures validly surrendered for
repurchase and not withdrawn. Transocean will accept debentures surrendered for
repurchase only in principal amounts equal to $1,000 or integral multiples
thereof. Original issue discount on the debentures validly surrendered for
repurchase and not withdrawn will cease to accrue immediately after Transocean
deposits with the paying agent cash sufficient to pay the total repurchase price
for the debentures to be repurchased pursuant to the Offer.
The repurchase price is based solely on the requirements of the indenture
and the debentures and bears no relationship to the market price of the
debentures or of Transocean's ordinary shares. Accordingly, the repurchase
price may be significantly higher or lower than the current market price of the
debentures. Holders of debentures are urged to obtain the best available
information as to potential current market prices of the debentures, to the
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extent available, and Transocean's ordinary shares before making a decision
whether to accept the Offer and surrender their debentures for repurchase.
If any debentures remain outstanding following expiration of the Offer,
Transocean will become obligated to repurchase the debentures, at the option of
the holders, in whole or in part, on May 24, 2008 and 2013 at repurchase prices
of $720.55 and $825.98 per $1,000 principal amount respectively. Transocean
will have the option to pay the repurchase price in cash, ordinary shares or a
combination thereof. On or after May 24, 2003, Transocean may redeem any
debentures that remain outstanding, in whole or in part, for cash at a price
equal to the issue price plus accrued original issue discount to the redemption
date.
EXPIRATION OF THE OFFER
The Offer expires at 10:00 a.m., New York City time, on May 27, 2003.
Although the indenture provides that Transocean is required to repurchase
debentures if the holder of the debentures delivers notice before the close of
business on May 24, 2003, because that date falls on a Saturday, Transocean has
extended the deadline for accepting the Offer to allow holders additional time
to accept the Offer. For purposes of the indenture, if a holder accepts the
Offer and does not withdraw his or her acceptance before the expiration of the
Offer, Transocean will treat the holder's acceptance and the repurchase as
having been made as of May 24, 2003. If holders do not accept the Offer on or
before the expiration of the Offer and validly surrender their debentures, their
debentures will remain outstanding subject to the existing terms of the
debentures.
Transocean does not expect to otherwise extend the period holders of
debentures have to accept the Offer. However, we reserve the right, in our sole
discretion, to provide a subsequent repurchase period of between three and 20
business days to allow additional time for holders to accept the Offer. If a
subsequent repurchase period is provided, all repurchase notices and debentures
surrendered prior to the initial expiration of the Offer and not withdrawn will
be accepted and promptly paid, and we will make a public announcement of the
subsequent repurchase period no later than 9:00 a.m., New York City time, on May
28, 2003. Unless otherwise provided in the announcement of the subsequent
repurchase period, all repurchase notices delivered and debentures surrendered
during the subsequent repurchase period will be promptly accepted and paid.
Unless otherwise provided in the announcement of the subsequent repurchase
period, holders will not have the right to withdraw repurchase notices delivered
and debentures surrendered during the subsequent repurchase period.
PROCEDURES FOR ACCEPTING THE OFFER
Holders may accept the Offer prior to its expiration as follows:
- Holders who are participants in The Depository Trust Company should
accept the Offer electronically through DTC's Automated Tenders over
the Participant Terminal System ("PTS"), subject to the terms and
procedures of that system. Holders accepting the Offer through DTC
need not submit a physical repurchase notice to the paying agent if
those holders comply with DTC's procedures.
- Holders whose debentures are held by a broker, dealer, commercial
bank, trust company or other nominee must contact that nominee if
those holders desire to accept the Offer and instruct that nominee to
accept the Offer on the holders' behalf.
- Holders whose debentures are held directly and not through DTC or a
nominee must deliver a written notice of repurchase, in the form
attached to the company notice delivered with this document, to The
Bank of New York, as paying agent.
The indenture requires that the repurchase notice contain:
- the certificate number of the debentures being delivered for
repurchase;
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- the portion of the principal amount at maturity of the debentures to
be repurchased, which portion must be in principal amounts at maturity
of $1,000 or an integral multiple thereof; and
- a statement that such debentures are to be repurchased as of May 24,
2003 pursuant to the terms and conditions specified in the indenture
and the debentures under the heading "Repurchase by the Company at the
Option of the Holder."
Delivery of the repurchase notice will be deemed made only when actually
received by the paying agent. The date of any postmark or other indication of
when a repurchase notice was sent will not be taken into account in determining
whether such materials were timely received. If such delivery is by mail, we
suggest that holders use properly insured, registered mail with return receipt
requested, and that the holders mail the repurchase notice sufficiently in
advance of expiration of the Offer to permit delivery to the paying agent prior
to the expiration of the Offer.
In delivering a repurchase notice through PTS, the electronic instructions
sent to DTC by the holder, and transmitted by DTC to the paying agent, will
acknowledge, on behalf of DTC and the holder, receipt by the holder of this
document and the company notice delivered with this document.
PROCEDURES FOR SURRENDERING DEBENTURES
After validly accepting the Offer, a holder may surrender his or her
debentures by delivering the required documents to the paying agent prior to, on
or after May 24, 2003. Debentures surrendered for repurchase must be
surrendered in principal amounts of $1,000 or an integral multiple thereof. The
method of delivery of debentures, including delivery through DTC and acceptance
through PTS, is at the election and risk of the person surrendering such
debentures and, except as expressly otherwise provided in the repurchase notice,
delivery will be deemed made only when actually received by the paying agent. A
holder will not receive any payment until his or her debentures to be
repurchased pursuant to the Offer are surrendered to the paying agent.
After validly accepting the Offer, a holder whose debentures are held by a
broker, dealer, commercial bank, trust company or other nominee must contact
such nominee if such holder desires to surrender his or her debentures and
instruct such nominee to surrender the debentures for repurchase on the holder's
behalf.
A holder who is a DTC participant may elect to surrender to Transocean his
or her beneficial interest in the debentures by delivering to the paying agent's
account at DTC through DTC's book-entry system his or her beneficial interest in
the debentures.
Holders whose debentures are held directly and not through DTC or a nominee
must surrender their debentures together with all necessary endorsements to The
Bank of New York, as paying agent.
DEBENTURES AND THE REPURCHASE NOTICE MUST BE DELIVERED TO THE PAYING AGENT
TO COLLECT PAYMENT. DELIVERY OF DOCUMENTS TO DTC OR TRANSOCEAN DOES NOT
CONSTITUTE DELIVERY TO THE PAYING AGENT.
WITHDRAWAL PROCEDURES
A previously delivered repurchase notice and any debentures previously
surrendered for repurchase may be withdrawn at any time prior to the expiration
of the Offer at 10:00 a.m., New York City time, on May 27, 2003. Holders may
withdraw a previously delivered repurchase notice and any debentures previously
surrendered for repurchase as follows:
- Holders who are participants in The Depository Trust Company should
withdraw a previously delivered repurchase notice and any previously
surrendered debentures electronically through DTC's Automated Tenders
over the Participant Terminal System, subject to the terms and
procedures of that system. Holders withdrawing a previously delivered
repurchase notice and any previously surrendered debentures through
DTC need not submit a written notice of withdrawal to the paying agent
if those holders comply with DTC's procedures.
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- Holders whose debentures are held by a broker, dealer, commercial
bank, trust company or other nominee must contact that nominee if
those holders desire to withdraw a previously delivered repurchase
notice and any previously surrendered debentures and instruct that
nominee to withdraw a previously delivered repurchase notice and any
previously surrendered debentures on the holders' behalf.
- Holders whose debentures are held directly and not through DTC or a
nominee must deliver a written notice of withdrawal to The Bank of New
York, as paying agent, stating the certificate number of the
debentures being withdrawn, the principal amount of the debentures
being withdrawn and the principal amount, if any, of the debentures
that remain subject to the previously delivered repurchase notice and
which has been or will be delivered for repurchase by Transocean.
A previously delivered repurchase notice and debentures surrendered for
repurchase that are properly withdrawn will be deemed not validly surrendered
for purposes of the Offer. A repurchase notice and any debentures withdrawn
from the Offer may be resurrendered by following the surrender procedures
described above.
PAYMENT OF REPURCHASE PRICE
Each holder of a beneficial interest in the validly surrendered debentures
required to be repurchased pursuant to the Offer, will receive the repurchase
price promptly after the expiration of the Offer, subject to receipt of the
surrendered debentures.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion, which is for general information only, is a
summary of the material U.S. federal income tax considerations relating to the
surrender of debentures for repurchase pursuant to the Offer. This discussion
does not purport to be a complete analysis of all potential tax effects of the
Offer. This summary is based upon laws, regulations, rulings and decisions
currently in effect, all of which are subject to change or differing
interpretations at any time, possibly with retroactive effect. Moreover, this
summary applies only to holders who hold debentures as "capital assets" within
the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code"), and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, regulated
investment companies, tax exempt investors, dealers in securities and
currencies, U.S. expatriates, persons holding debentures as a position in a
"straddle," "hedge," "conversion" or other integrated transaction for tax
purposes, or U.S. Holders (as defined below) whose functional currency is not
the U.S. dollar. Further, this discussion does not address the consequences
under U.S. federal estate or gift tax laws or the laws of any U.S. state or
locality or any non-U.S. jurisdiction.
For purposes of this discussion, a "U.S. Holder" means a beneficial owner
of debentures that is, for U.S. federal income tax purposes: a citizen or
resident of the United States; a corporation (or other entity that has elected
to be treated as a corporation) created or organized in or under the laws of the
United States or any political subdivision thereof; an estate the income of
which is subject to U.S. federal income tax regardless of its source; a trust if
a court within the United States is able to exercise primary jurisdiction over
its administration and one or more U.S. persons have authority to control all of
its substantial decisions; and certain electing trusts that were in existence
and treated as U.S. trusts on August 20, 1996. As used herein, the term
"non-U.S. Holder" means a beneficial owner of debentures, other than a
partnership, that is not a U.S. Holder as defined above. The tax treatment of a
partnership that holds debentures will generally depend on the status of the
partners and the activities of the partnership. Holders that are partnerships
should consult their own tax advisors about the U.S. federal income tax
consequences of surrendering debentures pursuant to the Offer.
Sale of Debentures Pursuant to the Offer. A U.S. Holder who receives cash
in exchange for debentures pursuant to the Offer will recognize taxable gain or
loss equal to the difference between (a) the amount of cash received and (b) the
holder's adjusted tax basis in the debentures surrendered. A U.S. Holder's
adjusted tax basis in the debentures will generally equal the U.S. Holder's cost
of the debentures increased by any original issue discount that was previously
included in income, or will be included in income this year, by such holder with
respect to such debentures. Subject to the market discount rules discussed
below, such gain or loss generally will be capital gain or loss, and will be
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long-term capital gain or loss if the U.S. Holder held the debentures for more
than one year. The deductibility of capital losses is subject to limitations.
A U.S. Holder who acquired debentures at a market discount generally will
be required to treat any gain recognized upon the repurchase of its debentures
pursuant to the Offer as ordinary income rather than capital gain to the extent
of the accrued market discount, unless the U.S. Holder elected to include market
discount in income as it accrued. Subject to a de minimis exception, "market
discount" generally equals the excess of the "adjusted issue price" (the sum of
the issue price of the debentures and the aggregate amount of original issue
discount which accrued on the debentures prior to the time acquired by the U.S.
Holder) over the U.S. Holder's initial tax basis in the debentures.
A non-U.S. Holder who receives cash in exchange for debentures pursuant to
the Offer generally will not be subject to U.S. federal income tax on any gain
recognized, unless (a) the gain is effectively connected with the conduct by
such non-U.S. Holder of a trade or business, or, in the case of a treaty
resident, is attributable to a permanent establishment or a fixed base, in the
United States, or (b) such non-U.S. Holder is an individual who is present in
the U.S. for 183 days or more in the taxable year of disposition and certain
other conditions are met, in which case the gain will be taxable in the same
manner as described above with respect to U.S. Holders.
Backup Withholding. Under the backup withholding provisions of the Code, a
U.S. Holder who surrenders debentures for repurchase will generally be subject
to backup withholding at the rate of 30% of any gross payment if such holder
fails to provide a certified Taxpayer Identification Number (Employer
Identification Number or Social Security Number). A U.S. Holder who provides a
certified Taxpayer Identification Number may nevertheless be subject to backup
withholding on the portion of the payment representing original issue discount
accruing this year, if Transocean has been notified by the Internal Revenue
Service that such holder is currently subject to backup withholding as a result
of a failure to report all interest or dividends or if such holder fails to
certify to Transocean that such holder has not been so notified. U.S. Holders
electing to surrender debentures should complete a Substitute Form W-9 and
attach it to the debentures being surrendered. If you are a U.S. Holder exempt
from backup withholding under the Code, please provide your Taxpayer
Identification Number and so indicate in Part 2 of the Substitute Form W-9.
If a non-U.S. Holder holds debentures through the non-U.S. office of a
non-U.S. related broker or financial institution, backup withholding and
information reporting generally will not be required. Information reporting,
and possibly backup withholding, may apply if the debentures are held by a
non-U.S. Holder through a U.S. broker or financial institution or the U.S.
office of a non-U.S. broker or financial institution and the non-U.S. Holder
fails to provide appropriate information (on Form W-8BEN or other applicable
form). Non-U.S. Holders should consult their tax advisors with respect to the
application of U.S. information reporting and backup withholding rules to the
disposition of debentures pursuant to the Offer.
ALL DESCRIPTIONS OF TAX CONSIDERATIONS ARE FOR HOLDERS' GUIDANCE ONLY AND
ARE NOT TAX ADVICE. TRANSOCEAN RECOMMENDS THAT HOLDERS CONSULT WITH THEIR TAX
AND FINANCIAL ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF SURRENDERING
DEBENTURES FOR REPURCHASE, INCLUDING THE APPLICABILITY AND EFFECT OF STATE,
LOCAL AND NON-U.S. TAX LAWS, BEFORE SURRENDERING THEIR DEBENTURES FOR
REPURCHASE.
REPURCHASES OF DEBENTURES BY TRANSOCEAN AND ITS AFFILIATES
Each of Transocean and its affiliates are prohibited under applicable
federal securities laws from purchasing debentures (or the right to repurchase
debentures) other than through the Offer until at least the tenth business day
after the repurchase date. Following that time, if any debentures remain
outstanding, Transocean and its affiliates may repurchase debentures in the open
market, in private transactions, through a subsequent tender offer or otherwise,
any of which may be consummated at prices higher or lower than the repurchase
price to be paid pursuant to the Offer. Any decision to repurchase debentures
after the expiration of the Offer, if any, will depend upon many factors,
including the market price of the debentures, the amount of debentures
surrendered for repurchase pursuant to the Offer, the market price of
Transocean's ordinary shares, Transocean's business and financial position and
general economic and market conditions.
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REPURCHASES OF OTHER DEBT SECURITIES BY TRANSOCEAN AND ITS AFFILIATES
Prior to or after expiration of the Offer, Transocean plans to repurchase
notes with aggregate principal amount outstanding of approximately $50 million
relating to project financing for the construction of the Deepwater Nautilus.
Prior to or after expiration of the Offer, Transocean and its affiliates may
repurchase debt securities other than the debentures and such notes in the open
market, in private transactions, through a tender offer or otherwise. Any
decision to repurchase such debt securities, if any, and the price paid in such
transaction will depend upon many factors, including the market price of such
debt securities, the market price of Transocean's ordinary shares, Transocean's
business and financial position and general economic and market conditions.
DIVESTITURE OF GULF OF MEXICO SHALLOW AND INLAND WATER BUSINESS
In December 2002, Transocean's subsidiary, TODCO, filed a registration
statement with the Securities and Exchange Commission relating to Transocean's
previously announced initial public offering of its Gulf of Mexico Shallow and
Inland Water business. Transocean expects to separate this business and
establish TODCO as a publicly traded company. Transocean is proceeding to
reorganize TODCO as the entity that owns that business in preparation for the
offering. Transocean plans to transfer assets not used in this business from
TODCO to its other subsidiaries. Transocean expects to complete the initial
public offering when market conditions warrant, subject to various factors.
Given the current general uncertainty in the equity and U.S. natural gas
drilling markets, Transocean is unsure when the transaction could be completed
on acceptable terms. Transocean does not expect to sell all of its interest in
TODCO in the initial public offering. Until Transocean completes the initial
public offering transaction, Transocean plans to continue to operate and account
for TODCO as its Gulf of Mexico Shallow and Inland Water segment.
(b) Purchases.
To Transocean's knowledge, no officer, director or affiliate of Transocean
is the holder of any debentures.
ITEM 10. Financial Statements of Certain Bidders.
Transocean believes that its financial condition is not material to a
holder's decision with respect to the Offer because the consideration being paid
to holders surrendering debentures consists solely of cash, the Offer is not
subject to any financing conditions, the Offer applies to all outstanding
debentures and Transocean is a public reporting company that files reports
electronically on EDGAR.
ITEM 11. ADDITIONAL INFORMATION.
(a) Agreements, Regulatory Requirements and Legal Proceedings. None.
(b) Other Material Information. Transocean files annual, quarterly and
special reports, proxy statements and other information with the SEC. You can
read and copy any materials Transocean files with the SEC at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
obtain information about the operation of the SEC's public reference room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains a Web site that
contains information Transocean files electronically with the SEC, which you can
access over the Internet at http://www.sec.gov. You can obtain information
about Transocean at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.
Transocean has filed with the SEC a Tender Offer Statement on Schedule TO
under Section 13(e)(4) of the Exchange Act and Rule 13e-4 of the SEC, furnishing
certain information with respect to the Offer. The Tender Offer Statement on
Schedule TO, together with any exhibits and any amendments thereto, may be
examined and copies may be obtained at the same places and in the same manner as
described above.
The documents listed below contain important information about Transocean
and its financial condition:
- Transocean's Annual Report on Form 10-K for the year ended December
31, 2002;
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- All other reports filed by Transocean with the SEC under Section 13(a)
or 15(d) of the Exchange Act since the end of the year covered by the
Form 10-K mentioned above;
- All documents filed by Transocean with the SEC under Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Schedule TO and prior to the expiration of the Offer; and
- The description of Transocean's ordinary shares contained in
Transocean's Current Report on Form 8-K filed with the SEC on May 14,
1999, as Transocean may update that description from time to time.
In the event of conflicting information in these documents, the information
in the latest filed documents should be considered correct.
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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.
Dated: May 13, 2003
TRANSOCEAN INC.
By: /s/ Gregory L. Cauthen
------------------------------------------------------------
Gregory L. Cauthen
Senior Vice President, Chief Financial Officer and Treasurer
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