A judgment is imminent in the legal battle for hundreds of millions of dollars in compensation for minority shareholders from the deals that resolved the impasse between Euronav investors John Fredriksen and the Saverys family.
After the Belgian tanker company’s fleet was carved up between the two sides and Fredriksen sold his shares, the Saverys’ Compagnie Maritime Belge (CMB) was obliged to launch a mandatory offer for the rest of Euronav.
US fund FourWorld Capital Management has asked a Belgian court to increase the bid, and a decision is due this evening from the Brussels Markets Court after close of play on the New York Stock Exchange.
The bid was launched in February at $17.86 per share for the remaining 43% of shares in Euronav.
This was effectively the $18.43 price that Fredriksen and Frontline was paid for their 26% holding, minus a subsequent dividend, and would have cost CMB $1.69bn.
At FourWorld’s valuation of $24.90 per share, the family company would have paid $2.34bn — a difference of $650m.
Shareholders ended up tendering 69m shares or 31.47%.
FourWorld’s lawyer Laurent Arnauts told TradeWinds the price should have also taken into account the fleet deal that saw Frontline pay $2.35bn for 24 modern Euronav VLCCs.
It should also have recognised a value for the potential payout from an arbitration begun against Frontline by Euronav after the Fredriksen company pulled out of its merger deal.
This was put at between $400m and $600m by Arnauts.
‘Very strong claim’
“It was a very significant claim. It was recognised as very strong by various attorneys, and its huge value was calculated by experts,” he said.
Regarding the VLCC sale, the lawyer explained: “What we say is that when you sell such a prime fleet to a competitor, this has a value which goes beyond the value of the individual vessels.”
“From the Euronav perspective, you lose a fleet that needed years to build, but also huge synergies and market share. And the competitor, which Frontline is, gets a fleet up and running,” he added.
“And so the sum of the parts, in other words, as a matter of principle, is worth more than the parts. It is a zero-sum game, and Euronav and its minority shareholders are on the losing end,” the lawyer said.
There is also a procedural element to the claim over the fleet sale, he argues.
VLCC sale tender?
Euronav should have gone out to tender to gauge the potential for another buyer and other price ideas, FourWorld maintains.
“It is a general requirement that you respect the interests of the company and of its minority shareholders in this respect,” Arnauts said.
“Any other big player in that market would have paid more than the sum of the parts. Because it has a huge value not to have to wait 10 years to constitute such a fleet, just in time for an up cycle in the oil transportation market,” he told TradeWinds.
“CMB can hardly deny there is a link between those three transactions, because Frontline was not prepared to sell its stake in Euronav without getting the fleet,” he said.
Asked about the outcome of the case, Arnauts believes a full or partial compensation order could be made, or the claim rejected. There is also the possibility that the court will bring in its own expert to scrutinise testimony further.
The parties involved in the case were heard in June.
Euronav and CMB declined to comment before the judgment.
The companies, together with Frontline, have previously said there is no merit in the case.
In a separate case before the Antwerp Enterprise Court, FourWorld is seeking the annulment of the deal, as well as Euronav’s subsequent takeover of the Saverys’ CMB.Tech green shipping company.
A court date has been set for 2026.
