New York-based activist hedge fund FourWorld is looking to reverse a deal involving Frontline, a shipping company controlled by Cyprus’s richest citizen, John Fredriksen, and Belgian crude oil shipping group Euronav, according to a report by the Financial Times.
Last year, Frontline purchased $2.35bn worth of oil tankers from Euronav; in exchange, it sold a shareholding in its business to Compagnie Maritime Belge (CMB), a transaction that was intended to resolve a deadlock between the two companies over control of Euronav.
FourWorld has taken legal action in Belgium to unwind the deal. The report quotes John Addis, CIO of FourWorld, who said that the situation represented “one of the most egregious cases” of a majority shareholder exploiting minority interests.
Euronav, a company listed in both New York and Brussels, has been at the centre of this saga. Euronav was founded in 1989 and initially formed a joint venture partnership with CMB, owned by the Saverys family — one of the oldest shipping dynasties in Belgium — in 1995. In 2022, Euronav announced a $4.2bn all-share merger with Frontline with the aim of creating the world’s largest oil tanker group.
However, the Saverys family (holding around 13% of Euronav) opposed the merger and described it as “value destructive”. Alexander Saverys, CEO of CMB, began increasing CMB’s stake in Euronav, reaching 25% by December 2022.
In January 2023, Frontline withdrew from the Euronav transaction, leading to legal disputes initiated by Euronav. By March, both CMB and Frontline had representation on Euronav’s board and outnumbered independent non-executives. In October, an agreement was reached between the Saverys family and Frederiksen to address the deadlock.
