US-listed tanker owner DHT Holdings has announced that its board has unanimously rejected a proposed offer by John Fredriksen’s Frontline to acquire all of the company’s outstanding shares of common stock.
Last Sunday, Frontline launched a bid for the company proposing to issue 0.725 of a Frontline share for each DHT share representing a price of $5.09 per DHT share.
DHT said that after a comprehensive review the board concluded that the Frontline proposal is wholly inadequate and not in the best interests of DHT or its shareholders.
Erik Lind, chairman of DHT, said: “We believe that Frontline’s proposal substantially undervalues our company and represents an opportunistic attempt to acquire DHT at a low point in the cycle.
“We are confident that DHT will generate significantly more value to shareholders as an independent company than the prospects afforded by this proposal.”
Among the considerations when reaching the conclusion, the board said that the Frontline proposal would not properly value DHT’s contribution to a combined company.
Since the Frontline offer, the company has adopted a one-year shareholder rights plan and declared a dividend of one preferred share purchase right for each share of DHT common stock outstanding, giving it time to consider the proposal from Frontline as well as to prevent a hostile takeover. It has also penned a deal for two VLCC newbuilds at Korea’s Hyundai Heavy Industries.
Frontline already has a 16% stake in the tanker owner, which currently has a fleet of 19 VLCCs and two aframax tankers.