Boskalis’ Board Says Buyout Offer from Shareholder is Unconvincing
Nearly three months after announcing that its largest shareholder was exploring taking the company private, the board of dredging and marine services company Royal Boskalis Westminster has reached operational agreements to permit the offer to proceed. The board, however, said it failed in its efforts to increase the $2.5 billion valuation, so it will remain neutral and not make a recommendation to shareholders.
“Boskalis has concluded that the intended offer price per share communicated by HAL Holding is not unreasonable, but in its opinion not sufficiently convincing to recommend this price to its shareholders,” the board said announcing the conclusion of discussions with the investment company. HAL, which has been an investor since 1989 and currently holds just over 46 percent of the stock, said in March it intended to make the offer for the remaining shares because, in its assessment, the current public listing offers limited added value to Boskalis, and does not outweigh the costs and other disadvantages of the listing.
The board said after meeting with its financial advisers it had entered into discussions with HAL to secure an increase of the intended offer price. Boskalis did not succeed in persuading HAL to increase its offer but reported that it had reached agreements on non-financial issues. This includes strategy, governance, organization, financing, and employees, with the agreement covering the four years after the completion of the offer, if HAL decides to proceed with a tender for the remaining shares. Further, the board reported that it “is under no obligation to cooperate with any post-offer restructuring measures which might be proposed by HAL.”
In March, Boskalis reported strong financial results for 2021 while saying the overall market looked favorable for the medium term as well as for the short term. They pointed to macro trends, including population growth and urbanization, that would drive the business.
The board announced it has decided, in the interest of all shareholders, to “present the offer with a neutral view on price.” By letting the offer proceed, shareholders will have the option to tender the shares under the intended offer.
If and when HAL launches the offer, Boskalis said it will convene an Extraordinary General Meeting of Shareholders to further explain its views on the offer.