Who’d be mad enough to buy NOL?

Who’d be mad enough to buy NOL?

In the interests of journalistic procedure Splash journalists have made contact with six of the leading runners and riders who have been linked – either online or in my head – with buying up Singapore’s Neptune Orient Lines (NOL). Unsurprisingly no one replied in the affirmative.

Hapag-Lloyd was a no comment, Evergreen a no, OOCL a no and a link to an article from April in which its chairman, CC Tung, had publically dismissed such conjecture, China Shipping was a no comment. “We do not comment on rumours and speculation,” was the response from Maersk, the largest shipowner on the Singapore flag. The only vague chink of light came from Beijing and Cosco where a spokesperson said any acquisition would be announced via a press release, not over the phone.

We also went back to NOL to ask if any line had made any advance their way – a spokesperson pointing us back to the Singapore Exchange notice posted late on Sunday night in which it said it had made no decision yet on selling up.

The whole story – for those who may be have been on holiday for the last week – kicked off on July 16 with the Wall Street Journal reporting that Singapore’s sovereign wealth fund, Temasek Holdings, had put the line up for sale for around $1.7bn. Temasek has a 65% stake in the line, which is listed in Singapore.

Since then the conjecture has gone wild. For my money, I cannot find NOL’s last remaining core business – boxline APL – an attractive acquisition. Its rigid structure has been its greatest weakness, and unlike most of its peers among the leading containerlines in the world it has remained in the red.

Splash columnist Charles De Trenck wrote about the issue this Monday warning that valuing a business that can be shrunk post-merger is a very delicate operation. The article received much feedback which he detailed on LinkedIn. The overwhelming majority of the feedback, he said, leans toward high hurdles to getting a deal done.

There are no lines out there willing to pay a premium for APL, he reported, while many of the big names in box shipping have been put off acquisitions having been through painful mergers and acquisitions themselves. He also observed that Temasek’s timing was off (something that is not exactly a first for this fund), buying at a peak and selling at a low.

Whatever happens going forward, Splash will be tracking every development in this strange sale.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

Related Posts

5 Comments

  1. Avatar
    Greg
    July 22, 2015 at 2:40 pm

    Well, the next development to track will be NOL’s 1H results on July 30. Don’t expect those numbers will be screaming “buy me!”, either.

  2. Sam Chambers
    Sam Chambers
    July 22, 2015 at 3:52 pm

    At Splash, we rarely cover quarterlies or interims, but July 30 may well be an exception!

  3. Avatar
    Armitage Shanks
    August 12, 2015 at 12:16 am

    One carrier that may be interested is UASC. It has the funds, and the desire to grow in the TP trade, APL’s halo market.

  4. Sam Chambers
    Sam Chambers
    August 12, 2015 at 11:53 am

    We’ll ask the powers that be over in Dubai for a comment and report back

  5. Sam Chambers
    Sam Chambers
    August 14, 2015 at 6:59 am

    Well Mr Shanks — we did as promised – check the site for what UASC had to say on the matter!