Belgian oil tanker and storage operator Euronav NV (NYSE:EURN) confirmed that the second shareholder, Compagnie Maritime Belge (CMB), offered to acquire Frontline Plc’s (NYSE: FRO) 26.12% stake in the company for $18.43 per share, which a mandatory public offer at the same price will follow.
The update and reports of Euronav going private led to a rally in Euronav and Frontline shares.
Euronav shares closed at $14.77 on Wednesday, implying a 25% premium on the purchase price.
The agreement would resolve the legal dispute initiated by Euronav against Frontline, a company where Norwegian shipping magnate John Fredriksen holds the majority of shares. This arbitration was a response to Frontline’s decision to abandon a planned $4.2 billion merger with Euronav in January.
The merger would have created the world’s largest publicly listed tanker company.
The 26.12% stake for sale in Euronav also includes Frontline-aligned Famatown, which Fredriksen also owns.
CMB, which currently owns 22.93% of Euronav shares with its affiliates, opposed the merger with Frontline.
The proposed transaction would also involve Frontline acquiring 24 VLCC tankers from the Euronav fleet for $2.35 billion.
Price Actions: EURN shares traded higher by 16.50% at $17.21 on the last check Thursday. FRO shares traded higher by 7.95% at $18.75.
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