Saverys to Pay $36M More for Euronav Due to “Special Benefits" to Frontline
Belgian securities regulators took the unusual position of ordering the Saverys family to retroactively increase its tender price for Euronav after finding Frontline received “special benefits” in the deal. The family’s company CMB has been ordered to increase the price paid to acquire the shares as well as extend the tender offer to shareholders who did not participate.
CMB reached an agreement last year to settle the struggle for control of tanker operator Euronav after months of battling with John Fredrikson’s Frontline. The two investment groups had battled for control of Euronav but ended in a stalemate that left Euronav directionless as they continued to fight over the strategy in the boardroom.
The agreement called for Euronav to sell tankers to Frontline and in exchange acquire the position in the company held by Frontline. CMB was then required to launch a mandatory tender to the remaining shareholders at the same valuation. It resulted in CMB acquiring more than 69 million shares and when combined with its existing position a total of more than 80 percent of the shares of Euronav, which was subsequently reformulated into the publicly-traded CMB.TECH.
Last month, the Market Court in Belgium however ruled in a shareholder lawsuit brought by an activist investor that the pricing of certain vessels sold by Euronav to Frontline implied certain special benefits to Frontline. The company calculated this at $0.52 per share while the court rejected higher value claims by the shareholder.
The Belgian Financial Services and Markets Authority (FSMA) followed up the court ruling ordering on October 7 that CMB must compensate the shareholders for this inequity in the share price. The company has till the end of the month to pay the added value which will amount to a total cost of approximately $36 million. In addition, the higher value must be offered to shareholders that did not participate in the tender.
The tender will be reopened at a price of $12.66 which is adjusted for distributions valued at $6.29 made by CMB to shareholders. CMB notes that the closing price of CMB.TECH shares on October 8 was $17.34.
The adjustment is small in comparison to the total value of the deal and the fact that they have moved on with the strategy since completing the tender in the spring of 2024. Euronav became the trading name of the tanker company when it was combined into the larger CMB.TECH which owns and operates more than 160 vessels also including bulkers, containerships, chemical tankers, offshore wind, tugs, and ferries. The company is also a key vehicle in the Saverys' pursuit to lead the industry in decarbonization through the applications of ammonia and hydrogen.