This week’s biggest shipping news – a deal to end the battle for tanker giant Euronav – has received favourable reviews from analysts.
Yesterday, the Saverys family and John Fredriksen came clean with how they intend to end the two-year battle for control of Euronav whereby John Fredriksen-controlled Frontline could walk away – pursuant to approval by regulators and shareholders- with 24 Euronav VLCCs for $2.35bn in exchange for Fredriksen backing away from his aggressive takeover manoeuvres.
Under the agreement, Frontline and Fredriksen’s investment vehicle Famatown will agree to sell all their shares, representing 26.12% of Euronav’s issued shares, in the Belgian firm to the Saverys’ Compagnie Maritime Belge (CMB) at a price of $18.43 per share to be followed by a public mandatory takeover at the same price taking Euronav private.
Ben Nolan, an analyst at Stifel, suggested the deal was a “reasonable transaction” for Euronav shareholders, the offer working out at a premium to where shares had been trading recently and 12.5% above September.
For Frontline, Eirik Haavaldsen, head of research at Pareto Securities, commented: “Frontline is raising the stakes — and risks — sharply here, and will completely dwarf all publicly listed tanker competition. With Euronav gone from the stock exchanges, liquidity in Frontline shares will gain further pace — and pave the way for further NAV premiums.”
In a further update, Pareto stated today: “The stage is set for a super-liquid tanker-beast.”
If the deal goes through, Euronav would be left with a fleet of 18 VLCCs and 24 suezmaxes while Frontline would become the largest publicly traded tanker owner, its fleet capacity leaping by 58% to 19.7m dwt.
A special meeting will be scheduled for shareholders to vote on the proposed sale of the 24 VLCCs to Frontline and the acquisition by CMB of the Fredriksen shares.
Analysts at Jefferies understand a simple majority is required for approval, meaning it is likely a done deal given the CMB and Fredriksen stakes combine to above 50%.
