NOL
NEPTUNE ORIENT LINES LIMITED
N03.SI
Neptune Orient Lines - S$1.30 offer now live ~ accept the offer
- Cut-off date for acceptance is 4th July 2016.
- Offer price is attractive given the weak industry fundamentals.
- CMA CGM intends to delist and privatize NOL.
Offer price unchanged at S$1.30; deadline for acceptance is 4th July 2016.
- After receiving the antitrust approvals from the regulatory authorities in the EU and China, CMA CGM has officially launched its all-cash voluntary conditional general offer to acquire all the outstanding shares of NOL at the previously disclosed offer price of S$1.30 per share. There is no intention to increase the offer price.
- CMA CGM intends to delist and privatise NOL through the offer.
We maintain our view that the offer is attractive; shareholders should accept the offer.
- We released a note in December 2015 recommending that shareholders accept the offer given the attractive takeover multiples against the backdrop of the still-anaemic state of the container shipping market (NOL’s 1Q16 results : NOL remained in a core EBIT loss position, with freight rates down by about 50% y-o-y and capacity growth still outstripping growth in throughput).
- Our recommendation is unchanged; based on the offer price which is also the current share price of S$1.30 (as at 6 May 2016), NOL trades at a P/BV ratio of 1.03x versus peer average of about 0.6x, thus representing an opportunity for shareholders to exit at an attractive price.
Offer will be unconditional due to irrevocable undertakings by major shareholder Temasek.
- CMA CGM currently owns 10.5% of NOL shares via open market transactions.
- Temasek Holdings (via its wholly-owned subsidiaries Lentor Investments Pte Ltd and Startree Investments Pte Ltd) has already undertaken to tender its 66.78% stake, which will make the offer unconditional (since it surpasses the 50% threshold). Hence, CMA CGM will control at least 77.28% of NOL before acquiring any further shares during the offer period.
Independent Directors are also in favour of the offer.
- The Independent Directors of NOL also released a statement in conjunction with the offer, saying that they concur with the recommendation of its independent financial adviser in respect of the offer, and accordingly, recommend that shareholders accept the offer.
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2016-06-07
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