Euronav has denied talk of a 75% majority being needed to seal its proposed merger with John Fredriksen’s Frontline.
Clarksons Platou Securities analysts Frode Morkedal and Even Kolsgaard said in a note to clients on Thursday they understood that shareholders would be offered a vote on the $4.2bn tanker transaction, with a 75% majority required to pass.
But a spokesperson for Euronav told TradeWinds the company has yet to even finalise the structure of the combination that investors will have a right to vote on.
“Depending on the structure, then the hurdle rate will be set, and this will likely be between 50% and 75%,” the spokesperson added.
An update will be provided some time after the company’s annual general meeting (AGM) on 19 May.
Euronav’s biggest shareholder, the Saverys family, has been increasing its stake in the Belgian owner in recent weeks to try to influence any vote.
The family, which now owns 17.5%, wants to combine the tanker company with its clean shipping operation CMB.Tech instead.
A pass percentage nearer 50% would stack the odds against CMB’s proposal, but anything towards 75% could bring the alternative deal into play, particularly if the family continues to build its stake.
But Fredriksen is also on the hunt for Euronav shares and has amassed a 12% holding.
The first barrier to forging ahead with the Frontline merger is the AGM, which is shaping up as a battle for control of the supervisory board.
The Saverys family is nominating three new directors, while Euronav is proposing one new face. There are five seats on the board.
Good news for investors
Clarksons Platou said: “A Euronav-Frontline merger would create the world’s largest crude tanker company.”
The market cap could increase to $6bn if vessel values reach newbuilding parity, the investment bank believes.
“This is good news for investors because the combined entity will have increased trading liquidity, cost savings and better balance sheet terms,” its analysts added.
Euronav management argues that the global economy will still require crude oil for many years to come as the energy transition advances.
A ‘custodian’ of the energy transition
“The proposed combination with Frontline will facilitate the emergence of a sustainable custodian in this process,” the shipowner added.
US-based Institutional Shareholder Services (ISS) has come out in favour of Euronav’s director nominees, which could bring any wavering funds on side.
Hedge funds, mutual funds and similar organisations pay ISS to advise on shareholder votes. ISS also often votes on their behalf.
Euronav cut its net loss in the first quarter to $43.4m, against $71m in the same period of 2021.
Revenue grew to $114.3m from $108.8m. Ebitda of $20m was below consensus.