In the previous part, we discussed that Gener8 Maritime Partners (GNRT) stock rose more than 44% last week. On the other hand, its peers Teekay Tankers (TNK), Frontline (FRO), and Nordic American Tankers (NAT) saw their stock prices fall in the previous week. In this part, we’ll see why Gener8 Maritime Partners experienced a steep rise.
Gener8 Maritime Partners’ stock price rose as tanker owner Euronav (EURN) nears a deal to merge with Gener8 Maritime Partners. On December 21, 2017, Euronav confirmed that it will acquire Gener8 Maritime Partners for ~$493 million in an all-stock transaction. Gener8 Maritime Partners shareholders will receive 0.7272 shares of Euronav for each share of Gener8 Maritime Partners. It will result in ~60.9 million new Euronav shares for Gener8 Maritime Partners’ shareholders. The exchange ratio implies a 35% premium based on Gener8 Maritime Partners’ share price on December 20, 2017.
After the merger
After Gener8 Maritime Partners and Euronav’s merger, the crude tanker company will have 75 crude tankers—44 VLCCs (very large crude carriers) and 28 Suezmax crude tankers. The combined entity will have assets over $4 billion. It will have an estimated market capitalization of ~$1.8 billion and a liquidity position of more than $750 million. Euronav and the combined company will remain listed on the NYSE and Euronext under the ticker “EURN.”
What to expect
The merger will require the approval of most of Gener8 Maritime Partners’ shareholders. If the deal is terminated under certain circumstances, Gener8 Maritime might be required to pay $39 million as a termination fee to Euronav.