Update: Saltchuk finalises OSG acquisition at US$950M

Seattle, Washington-headquartered Saltchuk and Tampa, Florida-headquartered OSG released a joint statement on the "definitive agreement" for the acquisition, saying the agreed price amounted to US$950M, at US$8.50 per share. The transaction valued OSG at US$653M. 

Under the terms of the agreement, which has been unanimously approved by the board of directors of both companies, Saltchuk will submit a tender offer for all outstanding shares it does not already own.

The purchase price represents a 61% premium to OSG’s 30-day trading average price on 26 January 2024,  as well as a 44% premium to the 26 January closing price of OSG’s shares and a 36% premium to Saltchuk’s initial indicative price of $6.25 per share," the companies said.

The negotiations for the acquisition began in January and have taken several months and, reportedly, multiple attempts to finalise.

“We are pleased to have reached an agreement that reflects our leading Jones Act business, longstanding customer relationships, and the value created by the OSG team over the past several years,” said OSG chairman Douglas D Wheat. “Following Saltchuk’s indication of interest to buy the Company at the end of January, the board of directors, with the assistance of external financial and legal advisors, undertook a review of the Company’s financial and strategic alternatives, including remaining a publicly held company. As part of that review, the board conducted a comprehensive process in which it engaged with Saltchuk and approached and engaged with other potential transaction counterparties. Informed by its review and that process, the board firmly believes Saltchuk’s increased offer represents compelling value to, and is in the best interest of, our shareholders not affiliated with Saltchuk.”

Saltchuk encompasses Foss Maritime (coastal tugs and barges, Hawaii and Alaska services), Young Brothers (Hawaii inter-island transport), Cook Inlet Tug & Barge (Alaska transport), AmNav San Francisco marine services and Saltchuk Aviation (Alaska air transport).

According to a filing with the US Securities & Exchange Commission, Saltchuk Resources Inc has acquired 21% of Overseas Shipholding Group (OSG) and in a letter to the OSG board, it has signalled its intention to acquire OSG and take the public-listed company private.

Saltchuk had approached OSG in 2021 and stated in the letter, “We continue to believe Saltchuk would be an ideal long-term home for the company and therefore propose to acquire all outstanding shares of OSG.”

Saltchuk believes its business model is better suited to the nature of the shipping business, “Shipping has multi-decade investment cycles and shorter-term economic cycles, both of which are better supported by a privately held family business.”

The letter, signed by Saltchuk Holdings chairman, Mark Tabbutt, includes, “We believe OSG is a great cultural fit with Saltchuk, that our values are aligned, and we would be honored to support and welcome OSG’s employees into the Saltchuk organisation.”

The acquisition would be funded through equity and debt with the aim of achieving an agreement within the 30-day due diligence period.