After the Board of Directors of crude oil tanker firm DHT Holdings rejected Frontline’s proposal earlier in February, John Fredriksen-controlled tanker owner and operator said that its offer was very attractive.
“We believe that our offer to DHT shareholders is highly compelling since it provides a meaningful upfront premium, while also giving all shareholders the opportunity to realize the full benefit of the significant synergies and attractive upside that a combined company would create,” Robert Hvide Macleod, Frontline’s Chief Executive Officer, said.
The proposed offer made by Frontline, which represented a 19% premium to the share price of DHT as of closing of January 27, 2017 and 31% premium to the 60 day volume weighted average price, was called “wholly inadequate” by the board of DHT, and not in the best interests of DHT’s shareholders.
“Rather than engaging in discussions with Frontline with the aim of achieving the highest possible offer to create maximum shareholder value, the Board of Directors of DHT adopted a one-year shareholder rights plan and has since continued to refuse to enter into any discussions,” Frontline informed.
DHT also stated that the proposed offer represented “an opportunistic attempt to acquire DHT at a low point in the cycle, which Frontline finds irrelevant given the all-share offer.”
Frontline added that it believes the combination of the two parties “would be better positioned to participate in a market recovery than either company would on a stand-alone basis.”
Together with its affiliates, Frontline holds 15.3 million shares of DHT, representing around 16.4% of DHT’s outstanding common stock based upon 93,433,804 common shares outstanding.