Euronav NV announces today that its two reference shareholders, CMB NV (“CMB”) and Frontline plc/Famatown Finance Limited (“Frontline”), have reached agreement on a transaction involving the Company that puts an end to the deadlock arising from their entrenched differences over strategy, while offering other shareholders the opportunity to realise cash value for their investment.

The transaction comprises three interdependent agreements:

• CMB will acquire Frontline’s 26.12% stake in the Company for $18.43 per share (the “Share Sale”);
• Frontline will acquire 24 VLCC tankers from the Euronav fleet for $2.35 billion (the “Fleet Sale”);
• The Company’s pending arbitration action against Frontline and affiliates will be terminated (the “Settlement Agreement”).

Following its acquisition of Euronav shares from Frontline, CMB will own 49.05% of the Company’s issued shares (representing 53% of the voting rights in Euronav). Euronav holds 8.23% of its shares in treasury. In compliance with Belgian takeover rules, CMB will launch a mandatory public takeover offer (“the Offer”) for all outstanding shares in the Company that are not already owned by CMB or its affiliates, at a price of $18.43 per share, reduced on a dollar-for-dollar basis by the gross amount per share of any future distributions by Euronav to its shareholders with an ex-dividend date prior to the settlement date of the Offer. The Offer price will be paid in cash.

The agreements to which the Company is party, namely the Fleet Sale for a price reflecting market value and the Settlement Agreement, fall within the scope of the related parties transactions procedure under Belgian law. They have been approved by the Euronav Supervisory Board, on the advice of the Independent Directors’ Committee stating that a continuing governance, structural and strategic deadlock between Euronav’s reference shareholders may adversely impact the Company’s ability to adapt to customer expectation and market evolutions, which is expected to become value destructive in the longer term.
More detail can be found in the announcement attached to this press release.

Lieve Logghe, Euronav CFO and interim CEO, stated: “After many months of uncertainty, the transaction announced today leverages the value that Euronav and its people have created through many years of hard work. It represents a balanced outcome for shareholders, who now have the choice between realising that value in cash or following Euronav in a new strategic direction under a new controlling shareholder.”

Transaction details

The transaction consists of three distinct agreements, each of which is dependent upon the approval and implementation of the other two:

i) CMB to purchase all Euronav shares held by Frontline

CMB has entered into the Share Sale with Frontline to acquire all of the 57,479,744 Euronav shares currently owned by Frontline (representing 26.12% of Euronav’s issued shares), for a purchase price of USD 18.43 per share.

The completion of the Share Sale is subject to merger control approvals and approval by a Special General Meeting (SGM) of Euronav shareholders of the conditionality of the Fleet Sale on the completion of the Share Sale in accordance with Article 7:151 of the Belgian Code of Companies and Associations.

ii) Frontline to acquire 24 VLCC tankers from Euronav for an aggregate purchase price of $2.35 billion, subject to completion of the Share Sale.

The Vessel Sale from Euronav to Frontline covers vessels with an average age of 5.3 years (see list in appendix) and is subject to merger control approvals and approval by a Special General Meeting (SGM) of Euronav shareholders of the conditionality of the Fleet Sale and the Settlement Agreement on the completion of the Share Sale in accordance with Article 7:151 of the Belgian Code of Companies and Associations. The cash price is subject to a price adjustment mechanism to reflect final delivery schedules.

iii) Euronav’s pending arbitration action against Frontline to be terminated.

As an integrated part of a proposed package deal to resolve the deadlock, the arbitration action filed by Euronav in January 2023 following Frontline’s withdrawal from their combination agreement will be terminated. No cash consideration is included in the Settlement Agreement. Without settlement, the case would have posed a significant obstacle to the resolution of the governance deadlock between the Company’s reference shareholders.

Mandatory takeover offer

Following the completion of the Share Sale, expected in Q4 2023, CMB’s shareholding will exceed the 30% threshold at which the acquirer is compelled under Belgian law to launch a mandatory takeover offer (“the Offer”). CMB will need to publish an Offer prospectus and launch its Offer for all outstanding Euronav shares. The Offer will be at a price of $18.43 per share, reduced on a dollar-for-dollar basis by the gross amount per share of any future distributions by Euronav to its shareholders with an ex-dividend date prior to the settlement date of the Offer. The Offer price will be paid in cash. Until the completion of the Share Sale, the Company will not distribute any dividends to its shareholders.

The Offer price is in line with Euronav’s net asset value (NAV) and, as such, representative of the Company’s intrinsic value in a context where most listed peers trade at a discount to NAV. Prior to the Offer launch, CMB will already hold a controlling stake in the Company.

The Offer, once made, which will carry no acceptance threshold and will provide Euronav shareholders with a choice between selling at a price that reflects the Company’s intrinsic value or remaining invested in a listed entity whose new controlling shareholder has stated an intention to change its strategic direction, as further outlined in CMB’s press release of 9 October 2023.

Euronav notes that CMB intends to maintain Euronav’s listing on Euronext Brussels and the New York Stock Exchange, and therefore has no intention to launch a squeeze-out bid following the closing of the Offer.

Indicative timetable

9 October, 2023 Announcement of proposed transaction
Signature of the related contracts

Q4 2023 Convening of Special General Meeting (SGM) announced

2 November, 2023 Euronav Q3 results

Q4 2023 SGM

Q4 2023 Share Sale completion and settlement
Fleet Sale completion and settlement

Q1 2024 CMB launches mandatory offer (MTO) for Euronav (art 5)

Q1 2024 Targeted approval date of MTO Prospectus

Q1/Q2 2024 Targeted close of acceptance period for MTO

Source: Euronav