Fredriksen Launches War of Words With International Seaways Board
Fresh out of the battle for control of crude tanker giant Euronav, John Fredriksen is launching a new war of words with the board of International Seaways, targeting two directors in particular - and International Seaways is pushing back.
Fredriksen's holding company Seatankers has built up a 16.6 percent stake in International Seaways, and it has pitched the idea of a strategic relationship, pointing to Seatankers' ready access to capital and its success in timing market cycles.
In response to these advances and to conversations with Seatankers, International Seaways' management has called for the adoption of a "poison pill" shareholder rights plan to block a possible takeover attempt. The board suggested that this would be appropriate because "one of the company's competitors has quickly and secretly amassed a significant stake in the company."
International Seaways has done well over the past year, and its share price has risen. Seatankers claimed that the "halo effect" of its investment interest is responsible for the solid recent performance of International Seaways' share price, and suggested that it was "offensive" that members of the International Seaways board have taken credit for their own company's success. These board members have "adamantly refused to engage with Seatankers," and have exhibited "a disheartening level of entrenchment [and] self-interest," Fredriksen's firm claimed.
In response, and to reduce the board's size, Seatankers will withold its votes for two members - director Alexandra K. Blakenship and CEO Lois K. Zabrocky.
"We remain hopeful that we can reach a reasonable resolution without the need for a future proxy contest," Seatankers concluded.
The pushback from International Seaways was immediate. Its board said that it has set up more than 10 meetings with Seatankers in "an attempt to establish a constructive relationship," and had proposed a settlement, including board representation for Seatankers - with standstill conditions to restrict Seatankers' ability to pursue proxy fights. Seatankers turned down this proposal and went quiet for more than half a year, the board claimed, re-emerging with the letter published Wednesday.
The firm also noted that Fredriksen is attempting to unseat two of the three women on the International Seaways board, one of whom served as a director for a Fredriksen company for 15 years. It also noted the acrimonious debate surrounding the failed Frontline-Euronav merger, describing Fredriksen's actions during that shareholder tussle as "disruptive and value-destructive."
International Seaways' annual shareholder meeting is scheduled for June 6.