International Seaways is putting together a plan to block shipping magnate John Fredriksen from taking over the US tanker company after recent share acquisitions.
US-based tanker company International Seaways is not over the moon about the fact that Norwegian-Cypriot shipping magnate John Fredriksen has rapidly been buying shares in the company.
Therefore, the tanker company has adopted a ”poison pill” plan to hinder the shipping profile from taking over the company.
The so-called ”poison pill” concept is a common move to defend a company against attempts of hostile takeovers by allowing existing shareholders to buy more shares at a discounted price.
The Rights Agreement is not intended to prevent an acquisition of the Company on terms that the Board considers favorable to, and in the best interests of, all stockholders
International Seaways
The Stakeholders Rights Plan that International Seaways has adopted for a year-long period, works by ”causing significant dilution to any person or group that acquires 17.5% or more of the shares of Common Stock without the approval of the Board. The Rights Agreement is not intended to prevent an acquisition of the Company on terms that the Board considers favorable to, and in the best interests of, all stockholders,” a filing with the United States Securities and Exchange Commission (SEC) states.
The filing states further that the aim is indeed to reduce the chance of a person or group taking control without paying all stockholders ”an appropriate control premium or providing the Board sufficient time to make informed decisions in the best interest of all stockholders.”
As recently as May 2 and May 4, the shipping profile bought 131,308 and 100,000 shares, respectively, in the US tanker company.
The most recent number from the SEC filings states that Fredriksen holds 16.19% of the shares, but Lloyd’s Register reports that he now sits on 17% of the shares.
If a person or group beneficially owns 17.5% or more of the Company’s common stock at the time of the adoption of the rights plan, such ownership will be “grandfathered”
International Seaways
On May 19 – on the same day as Euronav’s annual general meeting – International Seaways will distribute ”one right for each share of common stock outstanding” on May 19 at a discounted price.
”If a person or group beneficially owns 17.5% or more of the Company’s common stock at the time of the adoption of the rights plan, such ownership will be “grandfathered” at the level of ownership at the time of the adoption of the Rights Plan, but the rights would become exercisable if such person or group subsequently acquires any additional shares of Company common stock,” the filing states.
The tanker drama
There has been speculation that the purchase could be a move by Fredriksen to prepare himself for a potential merger between Frontline and International Seaways in case the already announced merger between Frontline and Euronav goes down the drain.
The Saverys family has actively been trying to hinder the merger ever since it was announced. And both parties have made several moves ahead of Euronav’s annual general meeting next week on May 19, 2022. The latest was purchasing shares from both parties in the Belgian tanker firm.
A move such as implementing a ”poison pill” tactic can be seen as another factor that strengthens the hypothesis that Fredriksen sees the US tanker carrier as a backup candidate for a merger with Frontline.
Another rumor is that Fredriksen hopes to conduct a three-way merger between all three parties, and that this is the real reason behind the move in purchasing shares in International Seaways, which the company now is actively trying to stop.
However, the Fredriksen sphere is not saying much on the matter other than solely calling the purchase in International Seaways a ”financial investment”.
