Analysts Nicolay Dyvik, Oyvind Berle and Petter Haugen raised the company to buy, suggesting the deal means the company has been reborn.
The combination will give Frontline an owned fleet of 65 vessels, excluding commercially managed and time chartered tonnage, they say.
“Hence, Frontline has been reborn and regained its position as a leading tanker company,” the analysts said.
“We believe focus will return to dividends as early as practically possible to secure premium pricing to peers, which would allow for accretive deals and growth,” the analysts said.
The merger had been anticipated in the market for some time and DNB Markets expects the deal will be completed in the fourth quarter of this year.
An enlarged company under the Frontline banner will have much greater earnings power, the analysts say.
Following the deal DNB Markets is predicting core operating profit of $490m for Frontline in 2016, up 153% on its earlier forecast.
Its 2017 EBITDA figure for the tanker owner has been raised by 187% to $388m.
