Shares of New York-listed Navios Maritime Acquisition surged 71.9% on Friday, the first day of trading after the announcement of its takeover by another Angeliki Frangou-led company, Navios Maritime Partners.
The all-shares combination creates the largest US-listed shipowner by vessel count and also rescues Navios Acquisition from what had been an impending November maturity deadline for $397.5m in ship mortgage bonds.
Investors had traded 25m shares of 45-tanker Navios Acquisition by lunchtime in New York on Friday against an average volume of 188,000. By the day's end, 35m shares changed hands, sending the share to a closing price of $3.61, up from a previous close of $2.10 before the deal was disclosed.
The merger valued Navios Acquisition at an implied price of $3.40 per share based on the previous closing prices of the two companies.
Shares of Navios Partners at first headed the other way, though the movement was more modest. They reversed course and ended Friday with a 2% improvement, closing at $27.52.
The combination creates a 143-ship goliath with a presence in bulkers, containerships and tankers, a fleet worth an estimated $4.2bn and a combined market capitalisation of some $822m based on current share prices.
While client notes on the deal have not yet rolled in from equity analysts, a mixed review came from investor and commenter J Mintzmyer of Value Investors Edge.
While Mintzmyer called it "fair to all parties on an NAV [net asset value] to NAV basis ", he said the Navios Acquisition bondholders were "bigger bailout winners" in seeing their notes redeemed at par two months early, effective 25 September.
Mintzmyer also assigned a grade of "D" to Navios Partners management, calling it "a misaligned firm with poor governance".
He said that Frangou is effectively doubling her holding in Navios Partners through private company Navios Ship Management (NSM) in receiving what are to become Navios Partners shares in return for providing the funding to achieve the bondholder bailout.
The investor calculates that the company is getting the shares at $26.67 each – well below the $80 per share NAV he assigns to the enlarged Navios Partners.
However, Mintzmyer also notes that with the stock currently trading around $25, any shareholder can buy shares cheaper than Frangou's entry price.
Mintzmyer disclosed that he is "long" shares of Navios Partners.
In an interview with TradeWinds on Thursday, Frangou defended the combination as an attractive play on a soon-to-recover tanker market that will create a large, more investible shipowner with balanced exposure in the dry bulk, containership and tanker markets.
