The Brussels Market Court in Belgium has delivered a landmark ruling that Compagnie Maritime Belge (CMB) must revise its offer price upwards in the mandatory takeover of Euronav NV, a decision that underscores the critical importance of safeguarding minority shareholder rights in the maritime sector. This ruling could see an additional US$46 million distributed to Euronav shareholders, a significant victory for investor protections.
At the heart of the court's decision was the finding that CMB's initial bid price failed to account for US$104 million in special advantages granted to Frontline during the sale of Euronav's newest 24 very large crude carriers (VLCCs). The court criticized the exclusive negotiations between CMB and Frontline, which effectively excluded Euronav from discussions about its own assets, describing the arrangement as 'particularly curious' and not reflective of normal market conditions.
The ruling mandates an increase of at least US$0.52 per share, considering the 69.2 million shares tendered in March 2024 and potential future sales. This decision not only sets a new legal precedent in Belgium but also sends a clear message about the necessity of transparency and fairness in corporate dealings. John Addis of FourWorld Capital Management LLC, which brought the case to court, hailed the ruling as a crucial step in addressing the interests of minority shareholders over those of the company's largest shareholders.
Further complicating matters for CMB and Frontline, the court has instructed the Belgian financial regulator (FSMA) to reassess the bid price in light of these findings, potentially leading to an even higher adjustment. This development could have significant implications for ongoing legal challenges, including a case in the Antwerp Enterprise Court that seeks to unravel CMB's takeover and the fleet sale to Frontline.
This ruling serves as a cautionary tale for corporations, emphasizing the need for equitable treatment of all shareholders in takeover bids and asset sales. As the shipping industry navigates through periods of consolidation and market volatility, the Brussels Market Court's decision may well influence the structuring of future deals, ensuring a more balanced approach to corporate governance and shareholder rights.
