CMB faces court fights in US and EU over Euronav acquisition

According to CMB, FourWorld Capital Management filed a request in a Belgian court claiming that CMB’s offer price is "too low" and requesting an adjustment to the bid price.

FourWorld filed a request with the Market Court in Belgium, asking the court, according to CMB, "to (i) determine that the price of the mandatory offer is too low as it does not take into account alleged special benefits that would have been granted to Frontline on top of the cash purchase price paid by CMB for its Euronav shares, and (ii) to order CMB to adjust the bid price taking into account such alleged special benefits. The request does not indicate what this higher price should be."

CMB said the filing is "without merit" and it intends to challenge, but informed its investors that, "in the unlikely event the request would lead to a decision of the Market Court to increase the bid price after the bid has closed, such increase shall also apply to shareholders who have already tendered their shares and CMB shall reopen the bid to grant shareholders the opportunity to tender their shares at the increased price".

The filing in Belgium follows a lawsuit filed in US District Court on 1 March that claimed CMB violated SEC rules, alleging the company disseminated "false and misleading" materials about the share offer.

1 March 2024

On 1 March, CMB said that FourWorld Capital Management had filed a complaint in a New York District Court alleging that CMB violated the US Securities Exchange Act in its offer to purchase all outstanding ordinary shares of Euronav from US shareholders.

CMB had launched a mandatory public takeover bid on all Euronav shares in the US, and the FourWorld complaint alleges, among other things, that CMB violated Section 14 (e) of the Securities Exchange Act of 1934 by disseminating false and misleading materials relating to the US offer. 

Calling itself a Securities Exchange Commission (SEC)-registered investment adviser "focusing on event-driven investment opportunities with particular focus on tax, legal and regulatory catalysts" FourWorld has, according to CMB, upped its stake in the company since the completion of Euronav’s acquisition of CMB.TECH. 

"FourWorld increased its stake in Euronav from just under 1.00% (ie the threshold for mandatory disclosure of acquisitions) to 2.41% by acquiring at least 3,133,334 shares for a total price of at least US$55.8M," 

The claimant is now seeking an injunction restraining CMB from completing the US offer and an award of damages in an unspecified amount, CMB said.

CMB said the suit is without merit, adding it believes a termination of arbitration that Euronav had filed against Frontline, and CMB’s sale of CMB.Tech to Euronav, were “on arms’ length terms and conditions and the sale prices were fair to Euronav and its shareholders”. 

“These transactions were approved by the independent members of Euronav’s supervisory board and supported by an overwhelming majority of shareholders months ago, after FourWorld’s representative had the opportunity to raise the same objections at Euronav’s recent shareholder meetings at which Euronav’s supervisory board provided detailed responses,” CMB said.
CMB said it intends to “vigorously defend” against the suit.

For much of 2022, Euronav, Europe’s largest tanker owner, was the target of a much-publicised takeover battle between John Frederiksen-controlled Frontline Tankers and the Saverys family, who control CMB.

Late last year, the parties involved struck an agreement that carved out some of Euronav’s fleet, with Frontline taking 24 VLCCs from the fleet for more than US$2.3Bn in exchange for John Fredriksen’s collective stake in Euronav.

In the months following the deal, CMB has set its sights on a "new strategic direction," concentrating on decarbonisation and diversifying the Euronav fleet into different shipping segments, aiming for a gradual decrease of the share of revenues coming from pure crude oil transport through asset acquisitions and new vessel orders.