Euronav's Future Clouded By Takeover Bids: Analyst Sees Unchanged Takeout Price And Possible Privatization

Stifel analyst Benjamin J. Nolan downgraded Euronav NV EURN to Hold from Buy at a lowered price target of $18.43 (from $20.00). 

Last week, the Belgian oil tanker and storage operator confirmed that the second shareholder, Compagnie Maritime Belge (CMB), offered to acquire Frontline Plc's FRO 26.12% stake in the company for $18.43 per share.

The proposed transaction would also involve FRO acquiring 24 VLCC tankers from the EURN's fleet for $2.35 billion.

CMB, which currently owns 22.93% of EURN shares with its affiliates, opposed the merger with Frontline.

Post closure, CMB will own 49.05% of EURN's outstanding shares, and the analyst notes that CMB will be required to make a mandatory public takeover offer at the same price. 

The analyst expects CMB's mandatory offer to come in Q1 2024, with finalization in H1 2024.

As CMB will have ownership of over half of EURN's voting rights, the analyst doesn't think there will be any improvement in the takeout price. Nolan expects EURN to become private in the coming few quarters.

The analyst estimates EBITDA of $908.1 million in FY23 and $776.4 million in FY24. 

Apart from this, Citigroup downgraded the company to Neutral from Buy, with a price target of $18.50.

Jefferies cut the price target to $21 from $22 and reiterated a Buy rating. 

Price Action: EURN shares are trading higher by 0.25% at $17.74 on the last check Tuesday.