Belgium’s Euronav is rejecting Frontline’s right to terminate a $4.2bn merger deal between the tanker giants and is contemplating options including arbitration and legal action.
John Fredriksen’s Frontline said on Monday it would not make its planned voluntary conditional exchange offer for Euronav, sending the Antwerp-based company’s shares downhill on Tuesday.
In a statement issued on Wednesday, Euronav said Frontline’s move had no basis and that the New York and Oslo-listed firm, which recently completed the transfer of corporate domicile from Bermuda to Cyprus as part of the merger plan, failed to provide a satisfactory reason for its decision.
The Hugo De Stoop-led Euronav said it had complied with its obligations under the combination agreement and had done everything in its power “to make the transaction a success”, adding that following detailed consideration with its legal and financial advisors, it was analysing its options and would take “appropriate action” to protect and preserve its rights and the interests of its stakeholders, “including but not limited to potential litigation and/or arbitration”.
The two companies announced the deal in April last year, which was firmed up in July and would have created a market-leading tanker giant with a fleet of 146 vessels. With Fredriksen walking away from the deal, its rival in the merger, Belgium’s Saverys family, which controls around 25% of Euronav, announced it would like to change the company’s strategy and its supervisory board’s composition.
