Fredriksen Sells Euronav Shares as Date is Set for Shareholder Vote

Analysts were left wondering what the latest developments mean in the battle for control of Belgian tanker company Euronav. At the same time, John Fredriksen’s Frontline set the date for shareholders to vote on the redomicile of the company as a precursor to launching the tender offer for Euronav, Fredriksen’s investment company reported in a filing with the U.S. Securities Exchange Commission that it sold shares of Euronav.

The investment companies controlled by Fredriksen reported selling just over 2 million shares of Euronav in recent days. While the overall change in the holding was not significant, it represents only about one percent of Euronav, it is more critical because Frontline ultimately needs 75 percent shareholder approval to complete the merger.

Fredriksen’s group now controls just under 25.9 million shares which represent just under 17.8 percent of Euronav. The Saverys family on the other hand which is competing to control Euronav recently purchased an additional four million shares raising their total holding to nearly 24 percent.

The sale of the shares reversed a pattern of acquisitions by Fredriksen. Between mid-August and mid-October, his investment companies reported acquiring over 16 million shares at an average price of just over $9 per share. Euronav’s shares are currently trading at around $18 meaning that they received nearly double the value for the shares sold.

The announcement of the sale of the shares came as Frontline set December 20 as the date for the vote to move the incorporation of the company from Bermuda to Cyprus. In addition to acknowledging in the statement to shareholders that moving the company is “a condition of launching and closing the tender offer and the merger,” Frontline cited other reasons. They noted that they expect being incorporated in Cyprus will, among other things, provide legal, administrative, and other efficiencies.

“As a well-established shipping and ship management center, Cyprus is expected to provide many benefits to the company, including but not limited to recruitment of experienced commercial and administrative and management personnel, a comprehensive tonnage tax regime, approved by the European Union, and a geographically advantageous position between our key market time zones.”

Previously, Frontline had said after receiving shareholder approval and completing the reincorporate they expected to launch a voluntary offer to swap shares of Euronav for Frontline. They said they expected the share offer would begin early in the first quarter of 2023 and would likely be followed by an effort to squeeze out the remaining shareholders in the company.

At stake is the effort to combine the two companies to create the largest operator of Suezmax tankers with a large fleet of VLCCs. The Sawverys family argues that the company does not need to become larger to meet its goals for decarbonization and that the resulting structure would be complicated and might lack the market strength predicted by the Fredriksen group.