Bruce Barnard, Special Correspondent | Apr 23, 2012 10:58AM EDT
Norway’s Fairstar Heavy Transport spurned an unsolicited takeover offer from Dutch heavy-lift shipping rival Dockwise.
Fairstar, quoted in Oslo but based in Rotterdam, said the Dockwise bid “significantly undervalues the business,” and recommended shareholders not to accept the “opportunistic” offer.
Dockwise said it has entered into share purchase agreements for the acquisition of approximately 54 percent of Fairstar shares. Agreements covering about 19 percent of shares have become unconditional and will be completed shortly.
Dockwise said the planned acquisition will be financed through an equity issue of $230 million to $300 million, consisting of a share issue of approximately $250 million of which $234 million has already been committed. The company will also issue $50 million bridge equity in preference shares.
Dockwise, which operates 19 vessels, said the deal offers Fairstar shareholders the opportunity to exit a low liquidity stock at a premium of around 22 percent.
Fairstar, which operates four heavy-lift ships, said the Dockwise offer is a “clear confirmation” of its failure to compete at the high-value end of the heavy-lift market.
“In every single contract award, we have competed against Dockwise and won,” Fairstar CEO Philip Adkins said.
Separately, Dockwise reported a first quarter net profit of $9 million, compared with an adjusted net loss of $5 million a year ago, as revenue grew to $120 million from $88 million.
The order backlog at March 31 stood at $587 million, up from $531 million a year ago.
Contact Bruce Barnard at brucebarnard47@hotmail.com.