Norwegian shipping and investment group Wilh Wilhelmsen Holding’s bid to buy out other shareholders in listed subsidiary Treasure is “not fair” financially, independent directors say.
The group launched the takeover bid on 7 June to provide a “liquidity event” for investors.
Investment vehicle Treasure holds 11% of South Korean car carrier, tanker and gas ship specialist Hyundai Glovis, a stake worth $528m.
Wilh Wilhelmsen, led by Thomas Wilhelmsen, in turn has 77.96% of Treasure, or 160m shares.
The offer price is NOK 20 ($1.88) per share, 9.3% above the previous day’s close of NOK 18.30.
Treasure’s two independent directors are the former deputy minister at Norway’s Ministry of Foreign Affairs, Marianne Hagen; and Benedicte Bakke Agerup, CEO of investment companies Laho and Procerta.
Bakke Agerup, who was chief financial officer at Wilh Wilhelmsen ASA until 2017, owns 585 shares in Treasure and will not accept the offer.
She and Hagen are not making a definitive recommendation to other investors, however.
They commissioned a fairness opinion from investment bank Pareto Securities.
Pareto took the view that the price “does not constitute a fair valuation of the company from a financial point of view”.
The directors noted that the deal represents a low premium compared with takeover offers generally made in the Norwegian market.
Block sale of Glovis stake?
“However, it should in this respect also be noted that companies with a large majority owner … generally attract lower premiums in a takeover offer when the majority owner who already has control makes an offer,” they added.
Pareto argues that Treasure could possibly achieve a higher implicit value through a block sale of its shares in Hyundai Glovis.
But any such divestment would need the support of Wilh Wilhelmsen, which is thought unlikely.
“The Treasure shares have traded at a significant discount to the underlying values during the past 12 months,” the directors said.
“The trading volume in the Treasure share has historically been relatively limited and the offer represents a liquidity event, which the shareholders of Treasure can decide whether to utilise or not.”
Slow take-up so far
Acceptances have been trickling in since the offer, with filings revealing that blocks of 3,200, 2,876 and 12,307 shares have been tendered.
Treasure’s non-independent directors are chairman Thomas Wilhelmsen and the Wilhelmsen group’s finance chief, Christian Berg.
Treasure’s market cap is around NOK 4.1bn ($370m), meaning the 22% slice not held by Wilh Wilhelmsen is currently worth $81m.
The group could consider a delisting if it reaches around 90% ownership.
Hyundai Glovis has a market cap of KRW 6.3 trillion ($4.6bn) and a fleet worth $3.85bn, according to VesselsValue, with 32 car carriers, four VLCCs, an LNG carrier, two VLGCs and five bulkers.
