VAL - Valaris should cut board size separate jackup and floater fleets shareholder says

2023-05-30 09:07:56 ET

Valaris ( NYSE: VAL ) has failed to achieve its key objectives since the company emerged from bankruptcy two years ago, shareholder Lodbrok Capital said Tuesday in a letter to the company's board.

Lodbrok, which holds more than 3% of total Valaris ( VAL ) common shares, said the company's board should be reduced in size, the company should separate its jackup and floater fleets in order to explore strategic options to maximize the value of each, and the company should immediately return any excess cash to shareholders.

The shareholder said Valaris' ( VAL ) $150M stock buyback commitment, representing ~11% of estimated liquidity and 3% of market cap, indicates "an excessively defensive board that lacks the required decisiveness needed to steer the company."

"We see no reason for keeping the floater and jackup businesses together that would possibly justify the conglomerate discount of a mixed fleet," Lodbrok said, adding that the offshore drilling services industry reached such a conclusion long ago.

More on Valaris:

• Financial and valuation comparison to sector peers
• Analysis: Valaris: An Expensive Hole In The Water
• Stock price return: Down 4.5% YTD, up 1.5% in the past 12 months

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