Stolt-Nielsen’s swoop for more Odfjell stock has brought the question of a chemical tanker mega-merger back into the spotlight.
Market leader Stolt-Nielsen snapped up shares held by Odfjell heir Johan Odvar Odfjell last night, to boost its holding in its Oslo-listed rival.
Analysts believe competition authorities would be unlikely to block any deal even though a combined operation would have more than 240 vessels.
Oslo-listed Stolt-Nielsen, the owner of Stolt Tankers, said in a filing on Monday that it had snapped up more than 3.2m shares in Odfjell, taking its overall holding to 13.6%, a slice worth NOK 1.2bn ($114m).
The Udo Lange-led group already operates the world’s largest fleet of chemical tankers, with more than 160 vessels. Odfjell controls more than 80.
Stolt-Nielsen bought into Odfjell two years ago and is open to a combination, although the investment is purely financial at this stage, as an alternative to buying ships.
Now it has added Johan Odvar Odfjell’s 5.3% stake, owned through his Farvatn II company.
Odfjell’s chairman and biggest shareholder, Laurence Odfjell, is not as keen on a tie-up, however, believing clients will still want more choice among owners.
“Rumours of a business combination between Stolt Tankers and Odfjell will naturally increase on the back of this transaction,” said Fearnley Securities analysts Oystein Vaagen and Fredrik Dybwad.
“We do not believe authorities would block a possible merger due to the existence of [product tanker] swing tonnage within the space.”
Positive view on the market
Clarksons Securities has previously calculated a combined fleet as representing around 13% of the chemical fleet.
Fearnley Securities is pegging Odfjell’s net asset value at NOK 160 per share, against a trading price of NOK 150 in Oslo on Tuesday, up 3%.
“While the transaction is done below our NAV, we view it as a testament to [Stolt-Nielsen’s] positive view on the chemical tanker market,” the analysts said.
Stolt-Nielsen has been enjoying strong chemical vessel rates, fuelled by canal disruptions and the Houthi attacks on ships in the Red Sea.
The company has been a past consolidator in the chemical tanker market.
In 2016, Stolt-Nielsen agreed to buy the fleet of fellow Norwegian owner Jo Tankers for $575m.
Long-standing plans for an IPO for Stolt Tankers have been shelved as the group focuses on its aim to build an integrated liquid logistics business.
