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Frontline adds to Euronav holdings in share swap
John Fredriksen-controlled Frontline is pushing for a merger with Euronav
Frontline has negotiated the acquisition of an additional 5.96M shares in Euronav in a private exchange for 8.34M Frontline shares.
The additional 2.95% stake in Euronav will take Fredriksen-controlled holdings in the company to nearly 15% of Euronav’s total shares.
"Frontline will issue a total of 8,337,986 new shares as a result of these transactions, equivalent to an exchange ratio of 1.4. Frontline will be entitled to the declared US$0.06 dividend to be paid by Euronav on the acquired shares on 8 June 2022. Settlement is expected to take place on or about 1 June 2022 by delivery of existing shares through a share lending arrangement with Frontline’s main shareholder Hemen Holding Ltd," the company said on its website.
After Frontline and Euronav announced an intended merger in early April, Euronav’s major shareholder Compagnie Maritime Belge (CMB) threw doubt on the deal, saying it did not support the takeover.
A potential merger between Frontline and Euronav would create the largest operator of Suezmax and VLCC vessels in the tanker sector.
Belgium shipping and industrial conglomerate CMB founded Euronav and the Saverys family who control CMB have, alongside John Fredriksen’s Famatown Finance, continued to up stakes in Euronav’s total shareholdings over recent months.
From 18-23 May 2022, the Saverys’ family’s CMB acquired an additional 2,225,000 shares in Euronav, spending US$25,749,865, using CMB’s working capital. In total, CMB directly owns 19.59% of the outstanding shares in Euronav, or 39,505,000 shares.
20 May
Euronav shareholders rejected a proposal to add three directors to the board who are linked to major Euronav shareholders the Saverys family and their business CMB Group.
None of the three directors proposed as Euronav board members by CMB Tech - Ludovic Saverys, Patrick De Brabandere and Bjarte Boe - were elected.
Europe’s largest tanker operator has been embroiled in a battle between John Fredriksen, the Norwegian billionaire who owns Frontline and has his sights set on Euronav, and Belgium’s Saverys family, which controls the CMB Group and wants to merge Euronav with its own clean shipping company CMB Tech.
The Saverys have steadily upped their stake in Euronav, inching closer to the 25% mark — a figure that would allow them to block the proposed merger with Frontline.
The proposal to add appoint three CMB-linked candidates to the Euronav board is the latest move by the Saverys and follows CMB and holding company Saverco purchasing another two million shares in Euronav earlier in May.
Ludovic Saverys is chief financial officer at CMB. Mr de Bradbandere is a CMB director and Bjarte Boe is a former CMB board member.
In a public statement, Euronav said “Fundamentally, Euronav believes that the lack of independence of the CMB candidates would weaken the board profile and threaten to bring conflicts of interest into the boardroom. If elected to the Supervisory Board, these candidates would be unable to offer an unbiased opinion on any future scenario for Euronav.”
In addition, the company said it believes the Saverys’ intent clashes with Euronav’s core business.
“They represent the position of a single shareholder who has publicly voiced its opposition to the previously announced combination with Frontline. Additionally, as they have expressed publicly, CMB wants to implement an alternative business plan involving a phase-out of Euronav’s core business and a likely combination of CMB Tech and Euronav that would conflict with Euronav’s current and future strategy” said Euronav.
Euronav called the rejection of these insurgent directors a “clear signal” that the majority of shareholders endorse the Frontline merger.
Grace Skaugen and Anne-Helene Monsellato were re-elected as independent directors for two-year terms. Ms Skaugen becomes the new chairperson, replacing the outgoing Carl Steen.
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