On November 27, 2017, Teekay Tankers (TNK) and Teekay Investments (TIL) announced the closure of the previously announced merger. According to the agreement, each outstanding share of Teekay Investment was exchanged for a right to receive 3.3 shares of Teekay Tanker’s common stock. Teekay Investments has become a wholly owned subsidiary of Teekay Tankers.
Teekay Tankers is a crude tanker company. It owns a fleet of 35 double hulk tankers—16 Suezmax, 12 Aframax, and seven LR2 product tankers. It also has four capital leased Suezmax vessels and one contracted time charter-in vessel. The company owns a VLCC in a 50-50 joint venture. It also owns a ship-to-ship transfer business.
Teekay Investments is a specialized investment company that focuses on the tanker market. Teekay Investments has a fleet of 18 vessels. The company was formed to opportunistically purchase, operate, and sell second-hand tankers to benefit from cyclical fluctuation in the tanker market.
Teekay Tankers’ stock didn’t have a very good run this year. As of November 29, 2017, the stock price has fallen 27.4% since the beginning of the year. The following are other crude tanker companies’ year-to-date returns:
- Nordic American Tankers (NAT) fell 51.3%.
- Frontline (FRO) fell 24.1%.
- Euronav (EURN) rose 11.5%.
- DHT Holdings (DHT) fell 5.1%.
- Navios Maritime Midstream Partners (NAP) fell 21.3%.
- Gener8 Maritime Partners (GNRT) rose 5.8%.
In the next part of the series, we’ll see why the merger is strategically important for Teekay Tankers.