S&P puts Seitel on developing watch

Standard & Poor's said it placed its B corporate credit rating on Seitel Inc. on CreditWatch with developing implications.

The agency said that the ratings action follows the company's announcement that its board of directors has received a proposal from ValueAct Capital to acquire all of the outstanding shares of Seitel that it does not already own for $3.65 per share in cash.

S&P noted that given Seitel's improved operating performance and credit metrics over the past 12 months, bolstered by strong cash resales from its seismic data library, the ratings could likely be affirmed at the current level.

Nevertheless, in light of ValueAct Capital's proposal, S&P said it will need to gain further clarity around the potential strategic implications of this transaction, if completed.

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