A Canadian investment firm has upped its stake in Nordic American Offshore — potentially triggering the company's poison pill provision.
Mackenzie Investment Corp, a Toronto-based company with CAD 65.5bn ($49.25bn) under management, disclosed in Securities and Exchange Commission filings this week that it now owns 1.16 million shares of the Emanuele Lauro-led company. That's good for 15.82% of the company, which increases the outfit's stake from the previous 10%.
The move, according to a source familiar with the situation, would trigger the shareholder rights agreement Nordic American Offshore adopted in December after Lauro's Scorpio Group took a controlling interest, unless a waiver is granted.
The shareholder rights plan, colloquially known as a poison pill, gives shareholders as of the end of 2018 the right to purchase additional stock should an unauthorised outsider acquire 15% or more of the company.
The measure excluded the Scorpio Group and grandfathered in shareholders with stakes greater than 15%. The move, the company said, "protects shareholders from coercive or otherwise unfair takeover tactics".
Mackenzie did not return requests for comment and New York-listed Nordic American Offshore declined to comment.
In general terms, an overage like that registered by Mackenzie does not always indicate a case of conflict. Investors at times have accidentally exceeded such caps and have been able to resolve the matter by either selling the excess or receiving a waiver.
Mackenzie's status as an institutional investor just incrementally over the limit, rather than a potential predator, might also factor into NAO's response in this case.
Prior to the Scorpio Group taking over, a proposed merger between Nordic American Offshore and Canadian Horizon Maritime was abandoned, leaving the company with mounting debt and dwindling cash reserves in a reeling offshore sector.
Mackenzie has several, small shipping investments. It owns 1.9 million shares of Hornbeck Offshore and a few thousand shares of Carnival, International Seaways and Matson.
The Canadian firm first bought into Nordic American Offshore last March.
Joe Brady contributed to this article.
