(LPC) - U.S. engineering firm McDermott’s US$2.26bn term loan fell in the secondary loan market on Tuesday after a US$2bn unsolicited bid from offshore oil services firm Subsea 7 threatened to break up McDermott’s agreed bid for onshore engineering firm Chicago Bridge & Iron (CB&I). We see significant merit in such a transaction for all shareholders, and with our financial and legal advisors continue to be open to discussions.”

Subsea 7 said that its proposal will be subject to McDermott’s scrapping of the merger agreement with CB&I, which was approved last month by a Russian antitrust body. “It’s going to be much more active than last year.”

In a letter last week, Subsea 7, which declined to comment, told McDermott it’s willing to raise its initial bidding price of $7 a share -- 15 percent premium over the average share price over the past 20 business days - but that it needs to enter official merger talks and gather operational information to assess how much it would pay. * PROPOSAL REPRESENTS A PREMIUM OF 16% TO LATEST CLOSING SHARE PRICE OF MCDERMOTT ON APRIL 20

* SUBSEA 7 PROPOSED TO ACQUIRE MCDERMOTT COMMON STOCK FOR USD 7.00 PER SHARE, PAYABLE ENTIRELY IN CASH OR UP TO 50% IN SUBSEA 7 STOCK AND BALANCE IN CASH

* PROPOSAL REPRESENTS A PREMIUM OF 16% TO LATEST CLOSING SHARE PRICE OF MCDERMOTT ON APRIL 20

* ON APRIL 20, 2018, BOARD OF DIRECTORS OF MCDERMOTT REJECTED SUBSEA 7’S PROPOSAL

* WILL CONSIDER INCREASING ITS PROPOSED PRICE UPON FURTHER ASSESSMENT OF MCDERMOTT’S BUSINESS THROUGH DISCUSSIONS WITH MCDERMOTT MANAGEMENT

* ADDITIONALLY, FOR ANY STOCK CONSIDERATION, SUBSEA 7 IS OPEN TO DISCUSSING LISTING OPTIONS FOR SHARES OF COMBINED COMPANY

* PROPOSAL IS SUBJECT TO TERMINATION OF MCDERMOTT’S PENDING TRANSACTION WITH CB&I

* SUBSEA 7’S LETTER TO MCDERMOTT - WILLING TO BE FLEXIBLE WITH RESPECT TO CONSIDERING A MIX OF CASH AND SUBSEA 7 SHARES

* WE SEE SIGNIFICANT MERIT IN SUCH A TRANSACTION FOR ALL SHAREHOLDERS, AND WITH OUR FINANCIAL AND LEGAL ADVISORS CONTINUE TO BE OPEN TO DISCUSSIONS

* PROPOSED TRANSACTION WOULD NOT BE SUBJECT TO ANY FINANCING CONDITIONS OR SUBSEA 7 SHAREHOLDER APPROVAL

* IT WOULD BE SUBJECT TO REGULATORY AND OTHER CUSTOMARY CLOSING CONDITIONS Source text for Eikon: Further company coverage: (Reporting By Terje Solsvik)
Underwater engineering firm Subsea 7 begins negotiations to acquire offshore company McDermott International, offering US$2 billion for it.