US fund FourWorld Capital Management claims that a series of transactions involving Euronav, John Fredriksen and the Saverys family took advantage of minority shareholders.
In the New York outfit’s first public comments on its lawsuits in the US and Belgium, chief investment officer John Addis told the Financial Times the deals constituted “one of the most egregious cases we have ever seen”.
FourWorld wants to unwind the transactions in which Fredriksen and the Saverys ended a shareholder impasse at Belgian tanker owner Euronav.
Fredriksen sold his 26% holding to the Saverys family’s Compagnie Maritime Belge (CMB) and bought 24 of Euronav’s modern VLCCs for $2.35bn.
The Saverys then launched a mandatory offer for the rest of Euronav, eventually building their stake to 92.23%, if share buybacks are included.
The family also sold its clean shipping operation CMB.Tech to Euronav.
FourWorld told the newspaper it opposed the original deal because it halted Euronav’s arbitration proceedings against Fredriksen’s Frontline, started after the tycoon pulled Frontline out of a merger with Euronav last year.
The US fund said Euronav would have had an “extraordinarily strong chance” of winning “large-scale damages”, to the benefit of smaller investors.
But Euronav chief executive Alexander Saverys hit back, saying winning the arbitration case was not certain.
“The company would have had to proceed with the case for years and years, incurring a lot of costs, keeping the company in deadlock for an indefinite period of time, and all of this for a very uncertain outcome,” he told the Financial Times.
‘We are in the right’
“We are adamant that we are in the right and that we have done nothing wrong. We will vigorously defend ourselves against these claims that have no merit.”
FourWorld failed in court bids last month in Belgium and the US to stop CMB’s mandatory offer.
It has now launched wider legal proceedings in Belgium to unwind the deals.
Frontline and Euronav, as well as private Fredriksen companies, have been summoned in this case, as well as CMB.
Frontline has yet to be served with legal papers, but insists it followed applicable laws and regulations at all times.
Euronav paid $1.15bn for CMB.Tech. FourWorld called this “extremely detrimental to the interests of the company and its minority shareholders”.
It pointed to a Euronav investor document from May 2022, when the company was under different management.
In it, Euronav said it had received “multiple proposals” from CMB to buy CMB.Tech, but the supervisory board believed this was “not attractive” and “would not be in Euronav’s best interest and would most likely destroy shareholder value”.
Saverys explained that CMB.Tech is now totally different from what it was two years ago.
He said the decision back then was due to Euronav focusing on being a pure-play crude tanker owner and wanting to merge with Frontline.
Since CMB’s mandatory offer was launched in February, FourWorld has increased its own stake in Euronav from just under 1% to 2.41% by acquiring at least 3.13m shares for $55.8m.
