John Fredriksen’s pursuit of Euronav faces a number of hurdles not least from the Saverys family who have come out in public opposing the proposed merger with Frontline.
The Saverys family, via their Compagnie Maritime Belge (CMB), have controlled Euronav since 1997 and are the tanker giant’s top shareholder today with a 13% stake.
In a release, CMB stated: “CMB questions the current strategy of Euronav, which focuses solely on transporting crude oil in a world that needs a rapid reduction in greenhouse gases.” CMB argued that a merger with Frontline will not create any added value for Euronav’s stakeholders.
CMB has proposed instead to diversify the Euronav fleet away from its crude oil origins to focus more on green fuel supplies, something the Saverys family is already heavily invested in. CMB said it will submit its proposals for the future of Euronav at the next shareholders’ meeting.
Awkwardly for the Saverys family, both the boards of Euronav and Frontline have approved the stock-for-stock combination between the two shipping lines.
The deal is based on an exchange ratio of 1.45 Frontline shares for every Euronav share resulting in Euronav and Frontline shareholders owning approximately 59% and 41%, respectively, of the combined group.
If the merger is approved, the entity would be called Frontline, and be headed by Euronav’s CEO, Hugo De Stoop and based in Antwerp.
The merger announcement yesterday came seven months after Fredriksen, a long term admirer of Euronav, started buying plenty of Euronav stock with the the Saverys’ responding by buying stock too.
The merged company would become the largest owner operator of crude tanker tonnage, with a combined fleet of 69 VLCCs and 57 suezmax vessels and 20 LR2/aframax vessels. For perspective, DHT, which would be the second largest crude tanker company following the merger, has a total of 26 VLCCs.
Fredriksen said yesterday: “A combination of Frontline and Euronav would establish a market leader in the tanker market and position the combined group for continued shareholder value creation in addition to significant synergies. The new Frontline would be able to offer value enhancing services for our customers and increase fleet utilisation and revenues which would benefit all stakeholders. I am very excited and give my full support and commitment to this combined platform.”
For Fredriksen, 77, the richest man in Norway, the Euronav deal shows he still has an appetite for the big deals, having built a career on the back of audacious takeovers. However, the Saverys opposition will be a concern particularly after previous takeover targets such as Overseas Shipholding, DHT Holdings, and Gener8 Maritime slipped from his grasp.
Not to forget how he engulfed Swedens ICB shipping by a backdoor deal most probably acheived by someone in the leading Swedish bank holding back the ownership papers for the VLCC Vanadis.