Belgian oil tanker and storage group Euronav disputes Frontline’s right to end a merger agreement between the companies and is considering its options, including arbitration and legal action, it said on Wednesday.
Oslo-listed oil transporter Frontline said on Monday that it was cancelling the $4.2 billion combination deal, which would have created the world’s largest publicly listed tanker company.
“Euronav has determined that Frontline’s unilateral action in pursuing the termination of the combination agreement has no basis under (its) terms … and that Frontline failed to provide a satisfactory reason for its decision,” the Antwerp-based group said in a statement.
Frontline, however, believes there are valid grounds for the termination, Chief Executive Lars Barstad said in an email to Reuters, and that the decision to cancel the deal was definitive.
“There is, of course, always a risk of differences of opinion when an agreement is terminated by one of the parties,” he added.
Euronav said it was analysing its options and would take “appropriate action … including but not limited to potential litigation and/or arbitration”.
Its shares, which plunged by about 20% after the news on Tuesday, were up 4.9% at 1348 GMT on Wednesday after a brief trading suspension.
“Euronav has complied with its obligations under the combination agreement and has done everything in its power to make this transaction a success,” the group added.
Asked about the reasons for the merger withdrawal, Frontline’s Barstad said that “certain conditions and assumptions under the agreement were not met”.