Analysts believe Frontline’s voluntary offer for Euronav’s stock will reach the required 50% plus one share target.
Clarksons Platou Securities said the announcement on Monday of an agreed combination structure to bring the two tanker companies together was largely the same as they had indicated in April.
Frontline and private companies controlled by main shareholder John Fredriksen already have 18.8% of Euronav.
“Although the Saverys family owns 19.6%, breaching the 50% threshold is likely to happen,” said analysts Frode Morkedal and Even Kolsgaard.
A full legal merger will be pursued at a later stage as that requires 75% of the capital to seal a deal.
The Saverys family opposes the transaction and wants to engineer a merger between its clean shipping company CMB.Tech and Euronav instead.
Clarksons Platou identified one change to the April agreement, however.
Frontline has been cleared to pay dividends of $0.15 per share without affecting the exchange ratio of 1.45 Frontline share for every Euronav one.
And Euronav can pay $0.09 per share, and has already paid $0.06 per share in June.
The combined company will be incorporated and headquartered in Cyprus, as opposed to Frontline’s legal base in Bermuda now.
Clarksons Platou said this was due to tax concerns.
Investors little moved
The company will keep listings in Brussels, Oslo and New York while a merger is concluded.
The transaction values Euronav at $12.09 per share. The stock was up a fraction at €11.29 ($11.38) on Monday in Brussels.
Frontline was trading up a little over 1% at NOK 84.95 ($8.30) in Oslo.
The new combined company, the world’s biggest crude tanker operation, will be 55% owned by existing Euronav shareholders and 45% by Frontline investors if all shares are tendered in the offer.
