Canyon Capital Advisors Warns It Will Oppose Rowan Sale To Ensco

Hedge fund Canyon Capital Advisors has warned it would vote against the $2.38 billion sale of offshore driller Rowan Cos. Plc (NYSE: RDC) to rival Ensco Plc (NYSE: ESV), casting doubt on a combination that had signaled optimism about the future of offshore exploration.

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U.S. crude oil prices have plunged by more than 30% since the deal was announced in early October, making offshore assets less attractive. At the time, oil was trading around $75 a barrel, a level that helps ensure profitability of expensive deep-water drilling projects.

Canyon holds a 6.3% stake in Houston-based Rowan, valued at more than $80 million, making it one of Rowan’s largest shareholders.