Euronav Struggle Continues as Fredriksen Invests Further $70 Million

The fight over the future of tanker operator Euronav is apparently far from over. A week after announcing that Frontline was not proceeding in its planned first step toward a merger with the Belgian company it has been reported that John Fredriksen’s companies have been buying shares of Euronav. Fredriksen reports investing more than $70 million bring the value of his total stake in the company to more than $600 million based on the current market price of the stock.

Two entities controlled by Fredriksen made a filing with the U.S. Securities Exchange Commission on January 13 reporting in the four days after announcing that Frontline was not proceeding with the voluntary share exchange that they had been acquiring shares of Euronav. One of the entities reports a purchase of an additional 5,127,000 shares at an average cost of approximately $14 per share. 

The filing declares that the share position is now being held for “investment purposes.” The filing notes the end of the proposed combination offer which under SEC rules shifts the shares to an investment. It does not preclude the company from taking further actions or selling shares. As a result of the acquisitions, the entity now holds 13.5 percent of Euronav, which when combined with the second entity means Fredriksen now owns 20.3 percent of Euronav’s shares or nearly 41 million shares. In early December, the entities reported a total position equaling just under 18 percent of Euronav.

Speculation is rampant on what Fredriksen’s plan is now that they have decided the combination of Frontline and Euronav cannot be completed as planned. Fredriksen had originally said they would combine the two public companies with a common board to realize synergies and opportunities as the tanker market has begun its new upcycle and demand grows for tankers. The Saverys family, Euronav’s largest shareholder with 25 percent of the stock, opposed the combination saying they would block a full merger and that the proposed combination would be difficult to manage.

Euronav’s board again finds itself caught between the two groups. After Frontline said it would not proceed, Euronav said to protect its shareholders it would consider arbitration or legal action because Frontline lacked a legitimate reason to back out of its contract. At the same time, the Saverys called for new discussions with the board of Euronav proposing to reexamine the strategy and possibly the management of the company.