Activist Investor Sues CMB Over “Misleading Information” in Euronav Offer
An activist investor group filed a complaint in the United States District Court for the Southern District of New York in connection with CMB’s U.S. offer to purchase all outstanding ordinary shares of Euronav held by U.S. investors. The offer was launched two weeks ago as a mandatory step in the consolidation of Euronav as a company majority held by CMB after the completion of the settlement agreement with Frontline.
In brief statements, CMB and Euronav confirmed they had become aware of the suit filed by certain funds managed by FourWorld Capital Management. The group which is headquartered in the U.S. and has offices in Germany has been registered since 2016 as an advisor in the U.S. reporting on its regulatory filing in March 2023 that it advises 18 clients and has more than $800 million under management. The group describes itself as “focusing on event-driven investment opportunities with particular focus on tax, legal and regulatory catalysts,” and has a history of taking activist positions against corporations including during transactions such as the CMB is currently conducting with Euronav.
FourWorld alleges in the complaint that among other things, that CMB violated U.S. securities law by disseminating materially false and misleading offering materials relating to the U.S. offer. The complaint seeks, among other relief, an injunction restraining CMB from completing the U.S. offer, and an award of damages in an unspecified amount.
“CMB believes that the suit is without merit and intends to vigorously defend against the suit,” the group said in its statement while Euronav confirmed that it is not a party to the suit.
FourWorld appears to have made its investment or begun to increase its stake in Euronav from just under the 1 percent threshold for mandatory disclosure to 2.41 percent currently held. CMB believes the advisory firm acquired at least 3,133,334 shares for a total price of at least $55.8 million. They believe the share purchase was timed to after the closing of the CMB.TECH acquisition on February 8 and the launch of the share offering by CMB on February 14. The offering is running through March 15, with CMB encouraging investors who believe in its vision for decarbonization not to sell shares and to remain an investor.
CMB reiterated the merits of the agreement with Frontline which sold 24 tankers and ended the arbitration. After months of a stalemate over the management of the tanker company, CMB agreed to acquire the shares of Euronav held by Frontline and in exchange agreed to sell Frontline tankers from Euronav’s fleet. After completing the transaction, CMB held 49 percent of Euronav’s shares and under Belgian law was required to launch an offer at the same price for the remaining shares.
The Saverys family communicated a clear vision of diversification and decarbonization through a focus on ammonia and hydrogen for the future of Euronav. Further, they state CMB’s sale of CMB.TECH to Euronav was on “arms’ length terms and conditions” reviewed by the shareholders and the independent directors. “The sale prices were fair to Euronav and its shareholders,” CMB asserts.
In these types of activist shareholder lawsuits, the companies have the choice of settling, or in some cases, they proceed to court for a lengthy process.