Any takeover or merger involving Euronav and John Fredriksen's Frontline will probably need a cash element rarely seen in the shipping sector until this year.
This is the view of Clarksons Platou Securities analysts Frode Morkedal and Omar Nokta, who argue it "seems likely" that any combination proposal will require some form of cash component.
This would echo LNG carrier company mergers and acquisitions (M&As) this year involving GasLog, Hoegh LNG, Golar LNG Partners and Teekay LNG Partners.
The analysts said: "Cash has been largely absent from shipping M&A deals, up until this year."
Ships-for-shares deals have been more common.
Fredriksen provoked speculation and analysis when he revealed this month that his private company Famatown Finance, based in Cyprus, is now the biggest Euronav shareholder on 9.8%.
Euronav shares gained 6.4% in the week to 15 October, the top performer across all shipping stocks as the industry came under pressure.
Famatown has spent $188.1m on the shares since August and is now sitting on a holding worth $231m.
This investment has fuelled speculation that a merger proposal or an outright acquisition could be on the horizon.
Consolidation within tankers has become a growing topic in weak markets, Clarksons Platou Securities said.
Fredriksen's Frontline trades above its net asset value (NAV), while Euronav's valuation has typically been below that of its large crude tanker peers.
Euronav has highlighted that a potential reason for the discount is its limited US retail investor ownership, and management is evaluating measures to improve and attract that interest.
While Euronav has the largest market cap in the tanker sector, $2.4bn, compared with Frontline's $1.8bn, Frontline is the larger in terms of total enterprise value at $3.9bn compared with Euronav's $3.7bn.
Enterprise value includes debt and cash on the balance sheet.
"Obviously, it is too early to assume a merger is underway, as M&A transactions have been difficult to conclude in the shipping markets in recent years, with stock-for-stock/NAV-to-NAV deals being the approach taken with some modest success," Morkedal and Nokta said.
Not a passive shareholder
Famatown's filing of a detailed 13D form to the US Securities and Exchange Commission indicates Fredriksen does not intend to be a passive shareholder and may intend to exert influence, analysts believe.
A combined Euronav/Frontline would become the single largest crude tanker player in the world, with the leading position in both VLCCs and suezmaxes.
Euronav is the second-largest VLCC player with an owned fleet of 40 tankers, plus three newbuildings, while Frontline is 11th with 17 owned VLCCs and eight on order.
On a combined basis, Frontline and Euronav control 7% of total global VLCC capacity.
Frontline's 27 suezmaxes make it the second-largest player in that segment, while Euronav is the fourth-largest with 22 vessels and five newbuildings.
Together, the two companies control 8% of suezmax capacity worldwide.
Fredriksen has previously signalled his desire to foster more consolidation in the tanker or bulker sectors.
"For me, it is not necessarily the case that we should have full control in these companies," he told Norwegian daily Finansavisen in 2018.
"I am no stranger to the fact that the group may be one of many shareholders in an even larger tanker or dry cargo shipping company than today. The problem is probably more that I do not immediately see which shipping companies are natural merger partners for us ... today, but a lot can happen here."
In the most recent of the big LNG shipping transactions in early October, infrastructure investment firm Stonepeak agreed a $6.2bn deal to acquire Teekay LNG Partners.
In January, Golar LNG said it was selling Golar LNG Partners and downstream floating storage and regasification assets to New Fortress Energy.
The next month, GasLog teamed up with BlackRock's Global Energy & Power Infrastructure in a deal in which it delisted from the New York Stock Exchange.
And in March, Norwegian family entity Leif Hoegh & Co unveiled plans to partner with Morgan Stanley Infrastructure Partners to take Oslo-listed Hoegh LNG private.
