* Business could be worth up to $1 bln - analyst
* Analyst values business at $6-$8/share * Land rig
business worth about $2/share
Dec 9 Drilling contractor Rowan Cos (RDC.N) may
hive off its manufacturing business in the near term and it
could be worth up to $1 billion, a Barclays Capital analyst
Rowan, seen as a potential acquisition target, needs to
jettison its onshore drilling and the manufacturing businesses
before it can attract bidders. [ID:nSGE68D0KQ]
The company first unveiled plans to spin off the
manufacturing business two years back and said early this year
that it was looking to sell its land rig business, which would
leave it as a pure play offshore driller with some of the best
jack-up rigs in the world.
The manufacturing business, LeTourneau Technologies, may be
worth about $800 million to just under $1 billion, or $6-$8 per
share, Barclays Capital analyst James West said.
He valued the company's land rig business at $250-$300
million, or about $2 per share, and sees North American
drillers as potential buyers.
At an analyst meeting on Thursday, Rowan's Chief Financial
Officer Bill Wells said the company was considering all options
to maximize value, the brokerage said in a note.
Rowan, which went public in 1967, owns about half the
world's top rigs, and more than half of them are less than 10
years old, against an industry average of about 20 years.
Analyst West valued each of the company's jack-up rigs at
about $40 per share, but said the market valued each of them at
about $29 per share.
Shares of Houston-based Rowan, with a market cap of about
$4 billion, were up 2 percent at $32.43 Thursday afternoon on
the New York Stock Exchange. They have outperformed the S&P Oil
& Gas Drilling sector index .GSPOILD by more than 27 percent
so far this year.
(Reporting by Thyagaraju Adinarayan in Bangalore; Editing by