Euronav NV - Ready to Reap the Rewards of Gener8 Acquisition

Equity Analyst

Nikesh Shukla

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

<p>On 21 December 2017, Euronav NV (EURN US) announced that it had agreed to acquire all outstanding shares of New York-listed Gener8 Maritime Inc. (GNRT US) in a share-for-share merger. Earlier, GNRT and the John Fredriksen-backed Frontline (FRO US) were reported to be in talks for a business combination after FRO’s failed bid to acquire DHT Holdings Inc. (DHT US). However, the discussions were short-lived. Euronav will acquire all 82.9m of issued and outstanding GNRT shares with 60.9m EURN shares (0.7272 EURN shares for each share of GNRT) and acquiring net debt of USD 1,175.9m. The proposed transaction translates into an enterprise value of USD 1,669.2m for GNRT’s fleet at EURN’s closing price of USD 8.10 per share on 20 December 2017. GNRT’s fleet comprises 21 VLCCs, six Suezmaxes, one Aframax and two Panamax tankers, with an average age of 5.4 years.</p><p>We believe the transaction, once completed, would be value-accretive to EURN’s common shareholders as EURN’s NAV will increase from USD 7.88 per share to USD 8.25 per share. The expanded fleet capacity will expand EURN’s customer base and the company’s market share in global crude oil transportation.</p>

On 21 December 2017, Euronav NV (EURN US) announced that it had agreed to acquire all outstanding shares of New York-listed Gener8 Maritime Inc. (GNRT US) in a share-for-share merger. Earlier, GNRT and the John Fredriksen-backed Frontline (FRO US) were reported to be in talks for a business combination after FRO’s failed bid to acquire DHT Holdings Inc. (DHT US). However, the discussions were short-lived. Euronav will acquire all 82.9m of issued and outstanding GNRT shares with 60.9m EURN shares (0.7272 EURN shares for each share of GNRT) and acquiring net debt of USD 1,175.9m. The proposed transaction translates into an enterprise value of USD 1,669.2m for GNRT’s fleet at EURN’s closing price of USD 8.10 per share on 20 December 2017. GNRT’s fleet comprises 21 VLCCs, six Suezmaxes, one Aframax and two Panamax tankers, with an average age of 5.4 years.We believe the transaction, once completed, would be value-accretive to EURN’s common shareholders as EURN’s NAV will increase from USD 7.88 per share to USD 8.25 per share. The expanded fleet capacity will expand EURN’s customer base and the company’s market share in global crude oil transportation.

A Christmas Present for Gener8 Shareholders - Euronav