Frontline announced that it has agreed to acquire a total of 5,955,705 shares in Euronav representing 2.95% of the outstanding shares in privately negotiated share exchange transactions with certain shareholders of Euronav N.V. where such shareholders of Euronav N.V. receive consideration shares in Frontline.
Frontline will issue a total of 8,337,986 new shares as a result of these transactions, equivalent to an exchange ratio of 1.4. Frontline will be entitled to the declared USD 0,06 dividend to be paid by Euronav on the acquired shares on 8 June 2022. Settlement is expected to take place on or about 1 June 2022 by delivery of existing shares through a share lending arrangement with Frontline’s main shareholder Hemen Holding Ltd.
Following completion of the issue of the new Frontline shares, Frontline will have a total of 211,868,965 shares issued and outstanding.
Frontline and Euronav announced on April 7th the plans for a potential combination between the two companies to create a global leader in the tanker industry. Since the announcement, positive volatility has returned to the tanker market in what Frontline believes is the early phase of a cyclical recovery for the industry coinciding with a historically low orderbook. Frontline’s belief in the strong merits of the combination, creating a global leader in the tanker industry, therefore remains unchanged.
Frontline and Euronav are working extensively to conclude due diligence and finalize an appropriate transaction structure. This may include a voluntary exchange offer by Frontline for Euronav shares as a first step, and Frontline would then consider setting the minimum acceptance ratio as low as 50.1% including shares already owned by Frontline.
The parties have identified significant operational and administrative synergies, and many of these can be addressed in parallel with the steps towards a full business combination. More details will be shared when the combination proposal has been finalized and can be announced to the market.