The Saverys family have come out arguing today that a proposed combination between tanker giants Frontline and Euronav would be “unworkable and value-destructive”.
Having now built up a 25% stake in Euronav – enough to block a full-on merger with John Fredriksen’s Frontline – Alexander Saverys, the CEO of Compangie Maritime Belge (CMB), has now written to the supervisory board of Euronav, explaining why he feels a combination as opposed to a merger will not work.
“If you continue to support the exchange offer by Frontline and if Frontline’s exchange offer would be successful, you will create a situation whereby Frontline controls more than 50 % of Euronav without it being able to complete a full merger of the two companies. Euronav will then remain a separate legal entity with a separate listing on Euronext Brussels and the New York Stock Exchange,” Saverys wrote in the latest chapter of the ongoing saga for the future of Euronav, a company his family have controlled for much of the last 25 years.
Saverys argued that two separate competing companies could then be led by the same board and same CEO, but with separate listings and minority shareholders.
“We believe that this will lead to material inefficiencies such as competing for the same clients and the same corporate opportunities. Each commercial or investment decision (e.g. sale and purchase of vessels, chartering of vessels or newbuilding orders) will likely lead to conflicts of interest and complex governance issues,” Saverys wrote.
Saverys has repeatedly outlined a future for Euronav under his family’s control in which he envisages fleet diversification and decarbonised maritime and industrial solutions.
Saverys concluded his letter by calling on the board to terminate the combination agreement.
Fredriksen and his Frontline top management have argued that a merger makes sense in terms of economies of scale, creating the largest independent tanker owner in the world.
Up next in the tanker tit-far-tat, on December 20 Frontline shareholders will vote on a domicile change from Bermuda to Cyprus.
