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initiated by Frontline with an exchange ratio of 1.45 Frontline shares for
1 Euronav share, possibly followed by a squeeze out, with the aim to then
propose a merger of Euronav into Frontline to Frontline's and Euronav's
shareholders as soon as possible
-
Combines the companiesâ extensive and complementary platforms and
capabilities to shape the new era of sustainable shipping with best-in-class
decarbonisation targets
-
Combined group to be named Frontline; operations to continue in Europe and
Asia including Belgium, Norway, UK, Singapore and Greece, with headquarters
in Cyprus
-
Mr. Hugo De Stoop, current CEO of Euronav, to be CEO of the combined group;
Mr. Lars H. Barstad, current CEO of Frontline, to join the Board of the
combined group
-
Listings of combined group to be on Euronext Brussels, NYSE and OSE
-
Enhanced performance through incremental synergies totaling a minimum of USD
60 million on a full annual run-rate basis
HAMILTON, Bermuda and ANTWERP, Belgium, 11 July 2022 - Frontline Ltd. (âFROâ or
âFrontlineâ) (NYSE: FRO - OSE: FRO) and Euronav NV (âEURNâ or âEuronavâ) (NYSE:
EURN & Euronext: EURN) are pleased to announce that they have entered into a
definitive Combination Agreement for a stock-for-stock combination based on an
exchange ratio of 1.45 Frontline-shares for every 1.0 Euronav-share (the
âCombinationâ), which was unanimously approved by all the members of Frontlineâs
Board of Directors and by all members of Euronavâs Supervisory Board. The
agreement memorialises the principal aspects of the previously announced term
sheet that was signed on 7 April 2022.
The combined group will create a leading global independent oil tanker owner and
operator with the management, capabilities, resources and scale to successfully
capitalise on the opportunities presented by the new era in the sustainable
shipping industry.
With its complementary platforms, financial strength and skills, the combined
group will be particularly well placed to provide innovative, clean and
sustainable oil shipping solutions in a highly competitive environment. The
combination of the two organizations will create a single best-in-class, highly
competent and experienced team. The enlarged fleet will enable the combined
group to provide better service to customers on a global basis. Additionally,
and in view of rapid technological changes, including digitalisation and new
âlow carbon fuelsâ adoption, the combined group will be able to mobilise more
resources and achieve meaningful scale to meet these challenges and
opportunities from the energy transition.
Commenting on the transaction, Mr. John Fredriksen said: âThis transaction
creates a clear market leader in the tanker market and will position the
combined group for continued, sustainable shareholder value creation and the
realisation of significant synergies. Frontline, with a fleet of 146 vessels,
will be able to offer value enhancing services for our customers and increase
fleet utilisation and revenues which will benefit all stakeholders. I am very
excited and give my full support and commitment to this combined platform.â
Mr. Hugo de Stoop, CEO of Euronav said: âThe proposed Combination is a huge
opportunity to take a leading position in the tanker industry as we seek to
master the transition to a world of clean, safe and sustainable shipping. This
transaction represents a unique opportunity to deliver substantially better
service to our customers, enhanced returns to our shareholders, and to provide a
unique platform where people can fully express their talents while advancing our
ambitious sustainability strategy towards decarbonisation of the shipping
industry.â
Mr. Lars H. Barstad, CEO of Frontline said: âFrontline believes this transaction
will form a powerful combination at an exciting point in the cycle. We are
amalgamating a strong operational, technical and commercial platform to enhance
shareholder value.â
Combination Structure
- The proposed Combination is structured as a voluntary conditional exchange
offer (the âTender Offerâ) by Frontline for all outstanding shares of
Euronav at an exchange ratio of 1.45 Frontline shares for 1.0 Euronav share,
possibly followed by a (simplified) squeeze out, with the aim to then
propose a merger of Euronav into Frontline to Frontlineâs and Euronavâs
shareholders as soon as possible thereafter (the âMergerâ). Based on
Frontline share price USD 8.34 per share (as of US close 8 July 2022), the
proposed exchange rate represents a value of USD 12.09 per Euronav share.
Frontline and Euronav have, in this respect, published a notice in accordance
with article 8§1 of the Royal Decree of 27 April 2007 on Public Takeover Bids
regarding Frontlineâs intention to make the Tender Offer which can be found
here: | live
XOSL#CompanyPressRelease-11153198
-
Assuming all Euronav shares are tendered in the Tender Offer, and following
the private acquisitions of Euronav shares in exchange for Frontline shares
undertaken in May and June, the combined company will be held as follows:
approximately 55% by existing Euronav shareholders and approximately 45% by
existing Frontline shareholders.
-
The completion of the Tender Offer will be conditioned upon Frontline owning
post Tender Offer at least 50% +1 of all the outstanding shares in Euronav
(excluding treasury shares unable to be tendered), the relocation of
Frontline to Cyprus, the absence of material adverse change, the receipt of
required regulatory approvals and other customary conditions. Frontline
together with its affiliate Famatown Finance Limited currently already own
37,881,478 shares in Euronav or 18.8% of the total outstanding shares
(excluding treasury shares)(i).
-
Prior to the Tender Offer completion, Euronav will be allowed to pay a
dividend for a total amount of USD 0.09 per Euronav share and Frontline will
be allowed to pay a dividend of USD 0.15, both with no impact on the
exchange ratio; for any dividends from Frontline in excess of such amount,
the Euronav shareholders accepting the Tender Offer will receive a
compensation per Euronav share equal to the dividend amount per Frontline
share times 1.45.
-
The combined group will be named Frontline, incorporated and headquartered
in Cyprus and will in addition continue to operate from various offices in
Europe and Asia including Belgium, Norway, UK, Singapore and Greece.
-
The combined group will be listed on Euronext Brussels, OSE and NYSE upon
Tender Offer completion.
-
Following completion of the Tender Offer, the governance and senior
leadership of the Group will be as outlined under the header âsenior
leadership and governance.â Euronav and Frontline will endeavor to complete
a full legal merger. Should, after completion of the Tender Offer, a
squeeze-out or legal merger of both companies not yet be feasible, then
during such interim period to the full merger, Euronav will retain its
separate listings on Euronext Brussels and the New York Stock Exchange, and
Euronav governance, as well as further integration joint projects and
synergies, shall be further organized taking into account legal obligations
of Euronext Brussels listed issuers, including article 7:97 of the Belgian
Code of companies and associations.
Strategic Benefits of the Combination
The combination will create a leading independent large crude tanker operator
with an anticipated market capitalisation of more than USD 4 billion based on
market values of the respective companies as of 8 July 2022, adjusted for the
shares in Euronav currently held by Frontline.
The combined Net Revenue and EBITDA for the two companies in 2021 was
approximately USD 668 million and USD 246 million, respectively.
The combined group will benefit from a balanced global vessel footprint with
highly complementary platforms including 146 vessels consisting of 68 VLCC, 56
Suezmaxes, 20 LR2/Aframax and 2 FSO vessels. The best-in-class combined
expertise of these businesses, supported by a strong balance sheet and access to
attractive financing will support industry leading operational break-even levels
for the combined fleet.
Value Creation & Synergies
The Combination is anticipated to deliver significant synergies of a minimum of
USD 60 million on an annualised basis, including savings in selling, general and
administrative expenses and other expenses resulting from (among other things):
- A larger fleet allowing for a better utilisation through, for example, use
of combination voyages
- Economies of scale driven by cost synergies in respect of daily operational
expenditures, dry-dock, and special project expenses
- Financial savings, primarily owing to a larger and stronger balance sheet
improving the cost of debt
The Frontline Board and Euronav Supervisory Board strongly believe the combined
group will represent a premier and well-capitalised company through which
investors can participate in the tanker market, benefiting from tangible
economies of scale via pooling arrangements, procurement opportunities, reduced
overhead and enhanced access to capital, as well as a highly liquid stock.
Both the Frontline Board and Euronav Supervisory Board consider the transaction
to be in the best interests of all shareholders and have each unanimously
approved the Combination Agreement, and subject to the absence of a superior bid
(as defined in the takeover rules) the Euronav Supervisory Board has undertaken
to recommend to its shareholders to tender their Euronav shares in the Tender
Offer.
Senior Leadership and Governance
The combined group will be headed by Mr. Hugo De Stoop as Chief Executive
Officer. Hugo De Stoop has a strong track record of sustainable value creation.
His experience will support the speed of execution of the Combination, allowing
the combined group to manoeuvre with efficiency in a tanker industry undergoing
rapid and fundamental changes.
The combined group will benefit from an efficient governance structure designed
to promote effective performance, with a one-tier Board limited to seven
directors, the majority of whom, including the Chair, will be independent.
Upon completion of a legal merger or as soon as Frontline holds 75% or more of
Euronavâs outstanding shares (excluding treasury shares held by Euronav), three
of the current independent directors of Euronav will be appointed to the
combined groupâs board. Up to two non-independent directors will be nominated by
Frontlineâs largest shareholder Hemen Holding Ltd. (âHemenâ), and two new
independent directors will be identified by Euronav and Hemen jointly, including
the Chair of the board of the combined group. Frontline CEO, Mr. Lars H.
Barstad, will join the Board of the combined group as a representative of Hemen
Holding Ltd.
Should there be an interim period between completion of the Tender Offer and the
completion of a legal merger (or as long as Frontline holds less than 75% of
Euronavâs outstanding shares (excluding treasury shares held by Euronav)), then
upon completion of the Tender Offer a one-tier board comprising seven directors
will be implemented by Frontline, with the following nomination rights to
reflect a proper balance of representation within the boardroom: three of the
current independent directors of Euronav will be appointed to the combined
groupâs board as independent directors, up to three non-independent directors
will be nominated by Hemen, and one new independent director-the Chair of the
combined group-will be identified by Euronav and Hemen jointly.
In order to ensure efficient execution of the Combination, an integration
committee is preparing the integration plan to be implemented immediately
following the closing of the Tender Offer.
Creating a Leader in Sustainable Shipping
The combined group will create a leader in sustainable shipping, aiming for the
highest Environmental Social and Governance (âESGâ) standards in the industry.
This will provide a platform for extending Euronav and Frontlineâs leading
positions in sustainable shipping and will allow the combined group to further
advance industry best-in-class sustainability practices and strategy. Both
entities have set ambitious decarbonisation targets that will be further
enhanced through this combination.
Moreover, the combined group will benefit from an ESG committee composed of
executive and board representatives. This committee will allow for proper
oversight of the combined groupâs sustainability strategy.
Indicative Timetable and Next Steps
Frontline will be relocated from Bermuda to Cyprus prior to the launch of the
Tender Offer. The Tender Offer is expected to be launched in Q4 2022, once the
relocation is achieved, and Frontline intends to proceed with a (simplified)
squeeze out if the conditions therefore are met.
The Merger will be pursued as soon as possible following the Tender Offer, with
the aim then being to submit the Merger to the Frontline and Euronav
shareholdersâ meetings. In the meantime, the parties will pursue all the
corporate and other steps necessary for the Combination.
Advisors
Lazard is serving as financial advisor to Euronav. Freshfields Bruckhaus
Deringer LLP is serving as legal counsel to Euronav. ABG Sundal Collier ASA is
serving as financial advisor to Frontline and DNB Markets, a part of DNB Bank
ASA, has acted as financial advisor to the independent part of the Frontline
Board. Advokatfirmaet SchjĂždt AS, Allen & Overy LLP, Seward & Kissel LLP and MJM
Limited are serving as legal counsel to Frontline in connection with the
combination. KPMG is advising Frontline on tax related matters.
July 11, 2022
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 (the âReform
Actâ) provides safe harbor protections for forward- looking statements within
the meaning of the Reform Act. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other than statements
of historical facts. Frontline and Euronav desire to take advantage of the safe
harbor provisions of the Reform Act and is including this cautionary statement
in connection with this safe harbor legislation. The words âbelieveâ,
âanticipateâ, âintendsâ, âestimateâ, âforecastâ, âprojectâ, âplanâ, âpotentialâ,
âmayâ, âshouldâ, âwouldâ, âwillâ, âexpectâ, âpendingâ and similar expressions
identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, Euronav and Frontline managementâs examination of
historical operating trends, data contained in company records and other data
available from third parties. Although Euronav and Frontline management believe
that these assumptions were reasonable when made, because these assumptions are
inherently subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond the companiesâ control, there
can be no assurance that Frontline or Euronav will accomplish these
expectations, beliefs or projections.
In addition to these important factors, other important factors that could cause
actual results to differ materially from those discussed in the forward-looking
statements include the ability of Frontline and Euronav to successfully complete
the proposed combination on anticipated terms and timing, including, among other
things, obtaining required shareholder and regulatory approvals, the occurrence
of the Merger, unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management strategies,
expansion and growth of the combined groupâs operations and other important
conditions to the completion of the acquisition, risks relating to the
integration of operations of Frontline and Euronav and the possibility that the
anticipated synergies and other benefits of the proposed combination will not be
realized or will not be realized within the expected timeframe, the outcome of
any legal proceedings related to the proposed combination, the failure of
counterparties to fully perform their contracts with Frontline or Euronav, the
strength of world economies and currencies, general market conditions, including
fluctuations in charter rates and vessel values (including the possibility of a
material decline or prolonged weakness in such rates), changes in demand for
tanker vessel capacity, changes in the companiesâ operating expenses, including
bunker prices, dry-docking and insurance costs, the market for the companiesâ
vessels, availability of financing and refinancing to meet the capital needs of
the combined group, charter counterparty performance, ability to obtain
financing and comply with covenants in such financing arrangements, changes in
governmental rules and regulations or actions taken by regulatory authorities in
the tanker industry, including without limitation, legislation adopted by
international organizations such as the International Maritime Organization and
the European Union or by individual countries, potential liability from pending
or future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns, crew wages, changes in demand for oil and petroleum
products, including but not limited as a result of inflation, and instances of
off-hires and other factors. Please see Frontlineâs and Euronavâs filings with
the U.S. Securities and Exchange Commission (the âSECâ) for a more complete
discussion of these and other risks and uncertainties.
You are cautioned not to place undue reliance on Frontlineâs and Euronavâs
forward-looking statements. These forward-looking statements are and will be
based upon Frontline and Euronav managementâs then-current views and assumptions
regarding future events and operating performance, and are applicable only as of
the dates of such statements. Neither Frontline nor Euronav assumes any duty to
update or revise forward-looking statements, whether as a result of new
information, future events or otherwise, as of any future date.
NO FORMAL NOTIFICATION OF TAKEOVER BID UNDER BELGIAN TAKEOVER RULES
Frontline and Euronav have issued a separate notice in accordance with article
8§1 of the Royal Decree of 27 April 2007 on Public Takeover Bids regarding
Frontlineâs intention to make the Tender Offer which can be found here:
| live
XOSL#CompanyPressRelease-11153198. Such notice is merely an expression of an
intention, and neither such notice nor this press release constitutes a formal
notification of a takeover bid within the meaning of the Royal Decree of 27
April 2007 and the Law of 1 April 2007 on Public Takeover Bids.
If Frontline decides to formally launch the Tender Offer, it will deposit a file
for this purpose with the Belgian Financial Services and Markets Authority
(FSMA), including a draft prospectus. The Euronav Supervisory Board will then
examine the draft prospectus and present its detailed opinion in a response
memorandum. If Frontline decides not to proceed with the Tender Offer, it will
report about this in accordance with its legal obligations.
IMPORTANT INFORMATION FOR INVESTORS
Frontline Relocation
Frontline intends to file with the SEC a registration statement on Form F-4 with
a proxy statement containing information about the relocation. Frontline will
mail a final prospectus and proxy information and other relevant documents after
the SEC completes its review. Frontline shareholders are urged to read the
preliminary prospectus, including the information and any amendments thereto and
the final prospectus in connection with the solicitation of proxies for the
special meeting(s) to be held to approve the relocation, because these documents
will contain important information about Frontline and the proposed relocation.
The final prospectus and the proxy information will be mailed to Frontline
shareholders of a record date to be established for voting on the proposed
transaction. Frontline shareholders will also be able to obtain a free copy of
the proxy statement, as well as other filings containing information about
Frontline without charge, at the SECâs website (www.sec.gov). Copies of the
filings with the SEC can also be obtained, without charge, by directing a
request to: Anders SĂžvde Henriksen, anders.henriksen@frontmgt.no. Additionally,
all documents filed with the SEC can be found on Frontlineâs website,
SEC Filings - Frontline. The information on Frontlineâs website is
not incorporated by
reference into this press release.
Exchange Offer
The exchange offer described in this press release has not yet commenced. This
announcement is for informational purposes only and is neither a recommendation,
nor an offer to purchase nor a solicitation of an offer to sell any ordinary
shares of Frontline or any other securities, nor is it a substitute for any
offer materials that Frontline or Euronav will file with the SEC. At the time
the exchange offer is commenced, a tender offer statement on Schedule TO,
including an offer to exchange, a letter of transmittal and related documents,
and a Registration Statement on Form F-4 will be filed with the SEC by
Frontline. In addition, a Solicitation/Recommendation Statement on Scheduled
14D-9 will be filed with the SEC by Euronav with respect to the exchange offer.
The offer to exchange all outstanding ordinary shares of Euronav will only be
made pursuant to the offer to exchange, the letter of transmittal and related
documents filed as part of the Schedule TO and no offering of securities shall
be made, except by means of a prospectus meeting the requirements of Section 10
of the U.S. Securities Act of 1933, as amended. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE TENDER OFFER STATEMENT, REGISTRATION STATEMENT AND THE
SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE EXCHANGE OFFER, AS THEY MAY
BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS
SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING EXCHANGING THEIR EURONAV
SHARES, INCLUDING THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER. Investors and
security holders may obtain a free copy of these documents (when available) and
other documents filed with the SEC at the website maintained by the SEC at
www.sec.gov or by directing such requests to the information agent for the
exchange offer, which will be named in the tender offer statement. Investors may
also obtain, at no charge, the documents filed or furnished to the SEC by
Euronav under the âSEC Filingsâ section of Euronavâs website at
Euronav - SEC filings and by
Frontline at SEC Filings - Frontline. The information on these
websites is not incorporated by reference into this press release.
In addition, you will be able to obtain free copies of these documents by
contacting the investor relations department of Frontline or Euronav at the
following:
±--------------------------------------±-------------------------------------+
|Euronav NV |Frontline Ltd. |
±--------------------------------------±-------------------------------------+
| |Lars H. Barstad |
|Mr. Brian Gallagher Euronav Investor|Chief Executive Officer, Frontline|
|Relations Tel: +44 20 7870 0436 |Management AS |
|Email: IR@euronav.com |Tel: +47 23 11 40 37 |
| |Email: lba@frontmgt.no |
±--------------------------------------±-------------------------------------+
The information included in this announcement is defined as inside information
pursuant to article 7 of the Market Abuse Regulation and is publicly disclosed
by Frontline in accordance with article 17 of the Market Abuse Regulation and
section 5-12 of the Norwegian Securities Trading Act.
NO OFFER OR SOLICITATION
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy, sell, or solicit any securities or any proxy vote or approval,
nor shall there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
About Frontline Ltd.
Frontline is an independent tanker company engaged in the ocean transportation
and storage of crude oil. The company is incorporated in Bermuda and
headquartered in Oslo, Norway with commercial offices in London, UK. Frontline
is listed on both the NYSE and OBX exchange in Oslo under the symbol FRO.
Frontline employs its fleet both on the spot and period market. Frontlineâs
owned and operated fleet consists of 18 VLCCs (with further five due for
delivery in 2022), 29 Suezmaxes and 20 LR2/Aframax tankers.
About Euronav NV
Euronav is an independent tanker company engaged in the ocean transportation and
storage of crude oil. The company is headquartered in Antwerp, Belgium, and has
offices throughout Europe and Asia. Euronav is listed on Euronext Brussels and
on the NYSE under the symbol EURN. Euronav employs its fleet both on the spot
and period market. VLCCs on the spot market are traded in the Tankers
International pool of which Euronav is one of the major partners. Euronavâs
owned and operated fleet consists of 2 V-Plus vessels, 40 VLCCs (with further
three under construction), 24 Suezmaxes (of which two vessels time chartered in)
with a further three under construction and 2 FSO vessels under long term
contract.
(i) Or 17.22% including in the denominator the treasury shares currently held by
Euronav. The transparency notification made by C.K. Limited can be found via
this link:
https://www.euronav.com/nl/investeerders/nieuws/persberichten/2022/openbaarmaking-
van-een-transparantiekennisgeving-4/
Kilde
