RIG in Trouble -- Rigzone

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Transocean Ltd. said it is offering 26 million shares of its common stock as the offshore oil drilling giant looks to raise funds to help refinance a recent acquisition of a Norway-based rival.

Shares were down 8.3% to $42.11 as the company said the offering represents up to 8.9% of its total issued and outstanding shares. The move casts a pall on Transocean's $1.43 billion purchase of Aker Drilling ASA at a time when the company has been dealing with disappointing quarterly earnings, a downgrade in credit ratings, and unsettled litigation related to the Deepwater Horizon oil spill.

The offering, and its dilutive effect, highlight the fact that the Aker acquisition "has now devolved from looking like a regrettable deal to a borderline catastrophic deal," said analysts with Simmons & Co. The analysts said they had previously criticized the deal as overpriced and ill-timed due to the strain it placed on the company's balance sheet.

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