The Boards of Euronav NV (NYSE: EURN & Euronext: EURN) (“Euronav” or the “Company”) and Gener8 Maritime, Inc. (NYSE: GNRT) (“Gener8”) are pleased to announce that they have reached an agreement on a stock-for-stock merger for the entire issued and outstanding share capital of Gener8 pursuant to which Gener8 would become a whollyowned subsidiary of Euronav (the merger to form the “Combined Entity”).
The merger will create the leading independent large crude tanker operator including:
- 75 crude tankers, including 44 VLCCs and 28 Suezmax crude tankers, representing
over 18 million DWT in the aggregate.
- Combined Entity balance sheet assets of over USD 4 billion.
- Estimated pro-forma market capitalization of approximately USD 1.8 billion based
on Euronav’s closing price of USD 8.10 per share on 20 December 2017.
- Marked-to-market leverage of less than 50% for the Combined Entity.
- A liquidity position estimated at more than USD 750 million, including cash on hand
and undrawn amounts available under existing credit facilities.
KEY TRANSACTION TERMS
- 0.7272 Euronav shares for each share of Gener8 (the “Exchange Ratio”) which is
expected to result in the issuance of approximately 60.9 million new Euronav shares
to Gener8 shareholders.
- The Exchange Ratio was calculated on the basis of several factors, including a
relative net asset value (NAV) methodology analysis.
- The Exchange Ratio implies a premium of 35% paid on Gener8 shares based on the
closing share prices on 20 December 2017.
- The merger will result in Euronav shareholders owning approximately 72% of the
issued share capital of the Combined Entity and Gener8 shareholders owning
approximately 28% (based on the fully diluted share capital of Euronav and the
fully diluted share capital of Gener8).
- The merger is subject to the approval of Gener8’s shareholders, the consent of certain
of Gener8’s lenders to assign certain debt facilities to the Combined Entity, the effectiveness
of a registration statement to be filed by Euronav with the U.S. Securities and Exchange Commission
(the “SEC”) to register the Euronav shares to be issued in the merger (the “New Registration Statement”),
the listing of such shares on the New York Stock Exchange (the “NYSE”) and other customary closing conditions.
- No additional equity issuance is currently contemplated beyond the approximately
60.9 million Euronav shares to be issued in exchange for Gener8 shares.
- Euronav as the Combined Entity will remain listed on NYSE and Euronext under the
- Carl Steen, Paddy Rodgers and Hugo De Stoop will remain respectively Chairman of
the Board, CEO and CFO of the Combined Entity.
- The merger will require the approval of the holders of a majority of Gener8’s
outstanding shares. A group of shareholders, representing approximately 48% of
the issued and outstanding shares of Gener8, including certain current directors of
Gener8, have committed or are expected to commit to vote in favour of this
merger, subject to the terms and conditions contained in voting agreements with
- A reputable third-party tanker owner has agreed to purchase from the Combined
Entity six modern VLCCs upon closing of this transaction at a price of USD 434 million. The sale will allow Euronav to maintain sustainable and robust financial ratios and keep leverage and liquidity well within Management’s desired levels.
The Euronav NV board has unanimously approved the transaction and the merger does not require the approval of Euronav’s shareholders.
Euronav and Gener8 believe that the merger will:
- Be accretive to the shareholders of both companies and is consistent with
previously set expansion criteria of Euronav.
- Create the world’s leading independent crude tanker operator with 75 large crude
tankers focused predominately on the VLCC and Suezmax asset classes and two
FSO vessels in joint venture.
- Provide tangible economies of scale via pooling arrangements, procurement
opportunities, reduced overhead and enhanced access to capital.
- Offer a well-capitalised, highly liquid company for investors to participate in the
- Through commitment to the Tankers International Pool (a spot market-oriented
tanker pool), provide the lowest commercial fees as a percentage of revenue in the
sector upon closing of the merger.
- Allow Euronav to retain the same disciplined dividend policy for the Combined Entity.
One of the independent Board members of Gener8, Steve Smith, is expected to join the Board of Euronav following completion of the merger, which is expected by the latest end June 2018.
In arriving at the Exchange Ratio, Euronav has taken into account a number of factors including the estimated net asset values of each company, the recent share price performance of the two companies, and the opportunity to combine two tanker fleets with good prospects for stronger combined growth.
The Gener8 board believes that the terms of the merger are in the best interests of Gener8 shareholders.
The Euronav Board considers the merger to be in the best interests of Euronav shareholders as a whole and has unanimously approved the transaction.
For further information about the Merger, please refer to the New Registration Statement to be filed with the SEC by Euronav and the proxy statement to be filed by Gener8.
Commenting on the merger, Carl Steen, Chairman of Euronav said: “The merger between Euronav and Gener8 is expected to deliver real value for both sets of shareholders. The financial strength of the Combined Entity together with a strong leadership team will make it well placed to navigate the tanker cycle”.
Paddy Rodgers, CEO of Euronav said: “This transaction marks an exciting development for Euronav. The merger creates the leading tanker company which is better placed to serve the needs of our customers and support our partners.”
Peter Georgiopoulos, Chairman and CEO of Gener8 said: “I have been a vocal advocate for consolidation in the shipping industry and have always stated that we would be a willing buyer or seller depending upon what is best for our shareholders. This transaction creates the largest independent VLCC fleet in the world. The combined company has a very bright future that will benefit both Gener8 and Euronav shareholders.”
Seward & Kissel LLP is serving as legal counsel to Euronav in connection with the merger, Shearman & Sterling LLP is serving as legal counsel to the transaction committee of Gener8 and Kramer Levin Naftalis & Frankel LLP is serving as legal counsel to Gener8. RMK Maritime is serving as financial advisor to Euronav’s Board of directors and UBS Securities LLC is serving as financial advisor to Gener8. For Belgian law matters, Euronav was advised by Argo Law.