UK shipbuilder Harland & Wolff (H&W) has seen a takeover proposal for the Isles of Scilly Steamship Co Ltd (ISSCL) “unequivocally rejected”.
The Northern Ireland-based shipyard confirmed that it made an indicative and preliminary approach to ISSCL regarding a possible cash offer.
But the ferry company said it does not believe that the approach from H&W is in “the best interests of the company’s shareholders”.
H&W, which is listed on the London Stock Exchange’s Alternative Investment Market, now has until 21 December 2023 to make a firm offer for ISSCL under the UK’s takeover rules.
The shipbuilder has previously stated that it has been considering the opportunity to build and/or operate ferries to service the Isles of Scilly to Penzance route, which it believes is significantly underserved by its current operation.
H&W said it believes that there is a “clear strategic, operational and financial rationale” for the proposed acquisition in pursuit of this and was “disappointed that the board of ISSCL unequivocally rejected this proposal”.
It added that the making of any firm offer would be subject to the satisfaction of customary pre-conditions, including due diligence and there can at this stage be no assurances that any offer will be made, or the terms of any such offer, even if these pre-conditions are satisfied or waived.
Earlier this year, H&W lost out to French shipbuilder Piriou in a bid to build a new passenger and a new separate cargo ferry for ISSCL.
Construction of both vessels is due to start at Piriou’s Vietnam yard in spring 2024. The vessels will then be transferred to Piriou’s yard in France for commissioning and testing, ready for delivery ahead of the 2026 season.
A month later, H&W said it would create a rival service to the Scilly Isles, claiming that sea and air routes were “underserved”.
However, the Belfast-based company said it would need UK government funding of £48m ($60.5m) to get the operation off the ground.
In contrast, ISSCL recently announced a £33.6m loan arranged with Lombard NatWest, one of the UK’s largest asset finance providers, to help fund its two newbuildings.
