Gener8 Maritime slumped out of the gate in New York trading Monday amid suggestions the tanker owner is no longer a takeover target for John Fredriksen’s Frontline.
Peter Georgiopoulos-led Gener8 had fallen into Frontline's sights after it turned its guns away from a hostile pursuit of DHT Holdings.
However, as TradeWinds reported this weekend, Frontline and Gener8 are understood to have been even further away from a deal than the suitor had been with DHT.
Gener8 stock slumped by close of 14% in early trading Monday, falling by $0.85 to $5.27 per share at the time of writing.
Michael Pak of AXIA Capital Markets notes the interest from Frontline has helped push up Gener8’s stock by 18% in the previous month and it was expected to soften today.
Robert Hvide Macleod, chief executive of Frontline Management has not responded to requests for comment on the company’s plans.
Frontline was first linked with a run for Gener8 by the Wall Street Journal in early June after Fredriksen officially called off the chase for DHT.
Talks between Fredriksen and Georgiopoulos resurrected a deal which was first one the table over a decade ago, when Frontline made an unsuccessful play for Gener8 forerunner, General Maritime.
Gener8 Maritme, born from the merger of Genmar and Navig8 Crude Tankers in 2014, has previously been a takeover target for another respected shipping billionaire, Idan Ofer, who bought a stake earlier in 2017.
A union of Frontline and Gener8 would have continued a trend of consolidation in the tanker market that has seen DHT combine with the BW Group VLCC fleet and Scorpio Tankers seal a $1bn plus move for Navig8 Product Tankers.
Fredriksen and Georgiopoulos first crossed swords back in 2004, when Frontline bought a stake in Genmar.
As with the DHT situation this year, Genmar rejected the advances as not in the best interests of its own shareholders.
Tensions between the two companies grew through 2005 but did not stop Genmar from selling Fredriksen six older aframaxes in November in what sources called “just business”.
By December 2005, Frontline had built up its stake again to 10%, and Genmar turned down a $39 per share cash offer. Genmar management is believed to have argued the price was under net asset value (NAV) and responded with the introduction of poison pills.
Frontline sold its full 12% stake in the summer of 2006, booking a profit of $9.7m and having reaped $13.3m in dividends.
