The world’s largest container-ship tonnage provider Seaspan Corp will be taken into private hands after major shareholders agreed a deal for an enterprise value of $10.9bn.
Parent Atlas Corp has agreed to accept an all-cash takeover at $15.5 per share in a move expected to see the stock delisted from the New York Stock Exchange next year.
The deal places the company in the hands of Poseidon Acquisition Corp, an entity formed by certain affiliates of Fairfax Financial Holdings, the Washington Family and Atlas chairman David Sokol.
The majority shareholders, who already hold 68% of the Atlas stock, will now acquire outstanding shares they do not already own.
Ocean Network Express (ONE), the Singapore-based container ship operation of Japan’s Mitsui OSK Lines, NYK Line and K Line, is also participating in the bid.
Poseidon will acquire all the outstanding common shares of Atlas, having revised the offer up from 14.45 per share when the deal was initially announced on 4 August.
Poseidon submitted an improved offer on 28 September for consideration by a special committee established by members of the Atlas board.
The new offer price represents a 34% premium to Atlas share prices as of 4 August.
Chair of the special committee Nicholas Pitts-Tucker said the offer had been approved after considering other strategic alternatives available to Atlas.
“We are pleased to have reached this agreement which, through the combination with Poseidon, introduces Atlas to an important corporate sponsor in the form of ONE,” he said.
“Fairfax, Washington, Mr Sokol and ONE will be outstanding partners as Atlas advances its operational improvements and drives growth to support its customers and enhance opportunities for its employees,” he added.
The agreement provides Atlas’ minority shareholders with a certain cash outcome due to be paid on closing, he added.
Bing Chen will remain in position as president and CEO of Atlas Corp.
He will contribute his equity in Atlas to become an owner of the company along with Poseidon. Washington and Fairfax will own a majority of the equity of Atlas.
“As we look at the industry’s trajectory, we believe the financial, operational and strategic flexibility we will gain as a privately held company with this group of owners and investors will position Atlas, our employees and customers for greater opportunity,” Chen said.
“I look forward to continuing to work with David and the rest of the Atlas team as we continue our progress, including preparing for the launch of our new vessel fleet, which we expect to be fully delivered by 2024.”
The transaction is expected to close in the first half of 2023. At that stage, Atlas common shares will cease trading on the New York Stock Exchange.
The deal is subject to approval by holders of a majority of Atlas common shares not owned by Poseidon and its affiliates.
New era
The move marks a new era for Seaspan, which is the world’s largest tonnage provider with 198 container ships, including more than 60 on order.
The company primarily focused on long-term, fixed-rate leases with the world’s largest container shipping liners.
It remains to be seen how the deal will change its relationship with Japanese liner operator ONE. The Singapore-based carrier is one of Seaspan’s main clients, with 23 vessels on charter and another 16 newbuildings in the pipeline.
Next to ONE, major operators of Seaspan tonnage include Cosco (29 ships), Maersk (20 ships), Yang Ming (15 ships), Hapag-Lloyd (14 ships), MSC (10 ships) according to Alphaliner data.
Israeli operator Zim is another major client and has committed to taking 25 newbuildings on charter from Seaspan.
In addition to Seaspan, Atlas owns a company called APR Energy, which provides mobile power to underserved markets through gas-powered turbines.
Seaspan currently controls a fleet of 131 container vessels with a total capacity of 1.77m teu.
The company’s confirmed orderbook stands at 67 boxships of 800,000 teu, excluding options.
Atlas shares traded above $14 per share, a significant premium to the level of $11.57 in the days prior to the announcement.
The company is scheduled to release its financial result for the third quarter shortly.
This story has been amended since publication to reflect that the deal closes next year.
