Frontline makes new bid for DHT Holdings

John Fredriksen’s Frontline has announced that it has made a new offer proposal to take over rival tanker firm DHT Holdings following its previous two offers being rejected.

In February, DHT Holdings rejected the offer made by Frontline as it reckoned the offer was “wholly inadequate” and “substantially undervalued”, and the senior management of the two companies even started a battle of words.

Frontline has now approached the board of directors of DHT Holdings to consider a proposed new business combination, which includes the ships already delivered and yet to be delivered by BW Group to DHT under the vessel acquisition agreement entered into by DHT and BW on March 23. The offer would be effected at an exchange ratio of 0.8 Frontline shares for each DHT common share.

Frontline believes that the proposed new combination of Frontline and DHT is expected to yield increased benefits.

“In particular, it is expected that the combination would create the largest public tanker company by fleet size, market capitalization and trading liquidity; DHT shareholders would benefit from a substantially lower G&A cost per vessel and profit from synergy values.  Frontline`s superior access to debt and equity capital markets should enhance free cash flow generation further,” Frontline said in a release.

“We are convinced that the proposed new combination of Frontline and DHT will maximize value for both sets of shareholders. We believe that this outcome is in the best interests of shareholders of both companies and will seek to ensure that shareholders of DHT have an opportunity to consider our offer. We look forward to engaging DHT management and its Board to achieve a mutually beneficial combination with Frontline,” said Robert Hvide Macleod, CEO of Frontline Management.

DHT acknowledged receipt of the proposal today with Erik Lind, chairman of the board, commenting: “While the proposed exchange ratio of 0.8 reflects no improvement from the proposal our board previously considered and unanimously rejected, our board will carefully and thoroughly review the offer, taking into account the changes to DHT’s fleet, market conditions and other developments that have occurred over the past two months.  I note that, as has been the case with their previous proposals, Frontline is requesting a reply in an unreasonably accelerated timeframe – in this case, less than 24 hours – which does not permit for an appropriate and diligent review by our board.  We will respond in due course.”

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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