Rowan Companies, Inc. (NYSE:RDC) today announced that its Board of Directors has decided to pursue a monetization of its wholly-owned manufacturing subsidiary, LeTourneau Technologies, Inc. (LTI). Rowan will be assisted in this matter by its financial advisors, Lehman Brothers, Inc. and Morgan Stanley & Co. Incorporated.
Daniel F. McNease, Chairman and Chief Executive Officer of Rowan, stated: "LTI's leading market positions in its operating segments have enabled it to generate significant returns for Rowan over time. Given LTI's record performance in 2007 and strength heading into 2008, we believe that now is the appropriate time for Rowan to crystallize the value we have created in LTI for the benefit of our stockholders."
The Company does not expect to disclose further developments regarding the process until the completion of a review and decision by the Board of Directors regarding a transaction or course of action.
In connection with this announcement, Rowan and Steel Partners II, L.P. have entered into an agreement pursuant to which Steel Partners has withdrawn its slate of three nominees for election to Rowan's Board of Directors at Rowan's 2008 Annual Meeting of Stockholders. The agreement also provides that if Rowan does not monetize its LTI investment by the end of 2008, either Warren Lichtenstein or another person designated by Steel Partners will be added to Rowan's Board effective January 1, 2009. Rowan also agreed that if the LTI monetization is accomplished through an initial public offering of LTI shares or a private sale of LTI, Rowan will repurchase at least $400 million of its outstanding common stock.