CMB has announced that most claims by FourWorld Capital Management regarding the takeover of Euronav were rejected by the Market Court in Belgium. At the same time, FourWorld is happy that the court agrees that the share price paid was too low and could result in an extra payout of USD 46 million.
In July 2022, Frontline announced plans to merge with Euronav to form the largest tanker company in the world. In January 2023, decided to scrap the merger deal. Euronav’s biggest shareholder, Compagnie Maritime Belge (CMB, the Saverys family), had been opposed to the deal from the start.
The abandoned merger resulted in a deadlock that was resolved by a solution that would allow Frontline to acquire 24 tankers from Euronav, with the first’s shares in Euronav then passing to Euronav’s biggest shareholder CMB. Early this year, CMB launched a mandatory public bid for the shares in tanker company Euronav NV. The bid closed on 15 March. In July, the company announced Euronav would continue under the name of CMB.Tech.
Not all Euronav shareholders united under the banner of FourWorld were happy with this outcome resulting in the court case before the Market Court.
Also read: Frontline-Euronav deal sealed: Frontline acquires tankers for shares
Court ruling
CMB states that FourWorld’s application sought, among other things, to challenge the price of CMB’s mandatory bid, alleging that it did not reflect purported special benefits, which FourWorld claimed to be as high as USD 7.04 per share, that were allegedly granted to Frontline in addition to the price paid by CMB for its Euronav shares. FourWorld also requested that the Market Court order CMB to adjust the bid price to account for these alleged special benefits.
In its ruling dated September 6, 2024, the Market Court dismissed the majority of FourWorld’s claims as inadmissible and/or unfounded, states CMB.
However, the Markets’ Court found that when calculating the bid price, CMB had failed to take into account special advantages worth USD 104 million granted to Frontline when simultaneously selling it the best part of Euronav’s fleet (its newest 24 VLCCs or very large crude carriers). The Court calculated these benefits to be USD 0.52 per Euronav share. This amounts to an additional pay out of USD 46 million.
Also read: Frontline abandons Euronav merger attempt
Euronav sidelined and pressured
Despite CMB saying most claims were rejected, FourWorld does reveal that the Court was critical of CMB and Frontline and quotes the court judgement:
‘It is particularly curious that the negotiations regarding the sale of the fleet, although they involved a transaction between Frontline and Euronav, took place exclusively between Frontline and CMB. Euronav was not at the negotiating table. As FourWorld rightly puts it, Euronav was completely sidelined.’ (para. 112)
‘CMB and Frontline exerted tremendous pressure on Euronav’s supervisory board. (…) The independent chairwoman of the council, in particular, was placed under intense pressure.’ (para. 115)
‘Under normal market conditions, transactions are negotiated between directly involved parties, especially between buyer and seller. This is not what happened here. The price of about 2.35 billion dollar paid by Frontline cannot therefore be considered market-conform under these circumstances. This price implied a particular advantage in favour of Frontline.’ (para. 117)
FSMA to decide on price increase
The Brussels Market Court has placed the resolution of the share price adjustment back in the jurisdiction of the Belgian financial regulator (FSMA), ordering it to re-examine the bid price taking into account its findings. This means that the FSMA may yet increase the bid price by more than USD 0.52. FourWorld states that it will ask the regulator to do so.
For its part, CMB says it will pay the amount of the increase ‘to all shareholders who validly tendered their shares in the bid’ should the FSMA order this. The specific structure, modalities and timing of any such adjustment has not yet been determined and would be subject to discussions with regulatory and market authorities in both Belgium and the United States.
Also read: Euronav founder and largest shareholder CMB opposes Frontline merger
Enterprise Court proceedings
The Market Court case is not the only one launched by FourWorld. The organisation has also filed claims before the Enterprise Court in Antwerp, Belgium. These claims concern the integrated solution for the strategic and structural deadlock within Euronav, as announced on October 9, 2023, of which CMB’s mandatory bid for the shares in Euronav formed the final piece, as well as Euronav’s acquisition of CMB.Tech NV.
CMB says it is comforted by the view of the Market Court on specific legal topics and considers these claims to be without merit and is vigorously contesting them.
FourWorld, however, takes a different view: ‘Having concluded that Euronav’s Supervisory board was sidelined and then coerced, this ruling paves the way for success in a separate legal challenge currently underway in the Antwerp Enterprise Court. In that case, FourWorld has petitioned for the unwinding of CMB’s mandatory takeover, Euronav’s USD 2.35 billion fleet sale to Frontline and Euronav’s decision to renounce and settle its arbitration claim against Frontline.’
The case is scheduled to appear before the Antwerp Enterprise Court in May 2026.
Also read: Planned merger Euronav and Frontline will create oil tanker giant
