Demarche Frontline propels Euronav to highest level in almost 7 years
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Demarche Frontline propels Euronav to highest level in almost 7 years

by

30 mei 2022

10:55

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The tanker company controlled by John Fredriksen has increased its stake in Euronav to almost 13 percent and is aiming for a voluntary barter offer with an acceptance threshold of 50.1 percent. Euronav shoots higher.

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Frontline sent Saturday an important press release about the planned combination with Euronav

† Firstly, Frontline increases its stake in Euronav by 2.95 percentage points. According to the stock watchdog FSMA, Frontlines’ stake amounted to 10.01 percent on May 27, so that it would increase to 12.96 percent.

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Remarkable is the way in which Frontline acquires the 5.96 million shares of Euronav. The shipping company takes them over from ‘certain shareholders of Euronav’ and does not pay in cash but gives the sellers new shares of Frontline instead. Frontline will issue approximately 8.34 million new shares for this purpose.

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A second thing that stands out is that the exchange of Euronav shares for Frontline shares has in fact already started.

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Voluntary exchange offer

Frontline further says that it is continuing to work intensively with Euronav to complete the due diligence, due diligence, and work out an appropriate transaction structure. “That could include a voluntary exchange offer from Frontline for Euronav shares as a first step, and Frontline would then consider setting the minimum acceptance threshold at 50.1 percent including the shares Frontline already owns.”

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So instead of a merger, we would initially have a takeover of Euronav by Frontline via a share exchange. If the operation were already considered a success at 50.1 percent, that would be a serious step forward for the fusion project. A true merger requires the approval of 75 percent of the shareholders.

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However, the Saverys family – Alexander and his brothers – oppose the combination of Euronav and Frontline. It would like to bring its subsidiary CMB.Tech, active in hydrogen projects, into Euronav and transform Euronav into a shipper of green fuels. CMB has an interest of 19.6 percent built up in Euronav, potentially allowing the company to hold back the merger project.

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Euronav shoots higher

The news from Frontline sends the Euronav share almost 5 percent higher to 12.56 euros. That is the highest price since November 2015, in 6.5 years.

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The parties involved may be buying up even more shares, which would of course further support the price. We are waiting for any participation notifications to get more clarity about this.

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