French container line CMA CGM has secured “firm commitments” from banks to finance its purchase of a 67% stake in Singapore’s Neptune Orient Lines (NOL) from state investment firm Temasek Holdings, reports say.
At its current share price of S$1.205, the APL parent company has an estimated total market value of around S$3.1bn ($2.2bn), or S$2.1bn ($1.47bn) for a 67% stake.
Finance commitments have reportedly been indicated by HSBC, BNP Paribas and JPMorgan, who look likely to fund the transaction as part of a syndicate, according to reports from Reuters.
NOL and CMA CGM have been in negotiations for some weeks, and last month entered into an exclusivity arrangement for the potential acquisition, for which the deadline is December 7.
If CMA CGM successfully buys Temasek’s majority stake in NOL, the deal trigger a mandatory offer to acquire the rest of the company, which could lead to the de-listing of NOL.
NOL’s former deputy CEO oLim How Teck values the company slightly higher than its estimated market value. Lim recently said NOL’s book value is S$1.38 ($0.98) per share, making NOL’s book value as a complete company around S$3.59bn ($2.55bn), or S2.4bn ($1.7bn) for a 67% stake.