Frontline to DHT: Let the shareholders decide

DHT Holdings' board of directors rejects the Frontline bid announced on April 25. The board adds that it is about time that the parties move on. Instead, Frontline replies that the bid should be presented to the shareholders, according to a comment to ShippingWatch.

The board of directors at DHT Holdings has once again rejected a purchase proposal from John Fredriksen's Frontline, and this time the DHT board calls for Frontline to move on, so that both companies can focus on running their businesses.

This is evident from a letter sent by the board of directors to Frontline CEO Robert Hvide Macleod.

"We believe that it is time for both Frontline and DHT to turn our attention to more productive endeavors," writes the DHT board of directors, noting that the proposal is exactly the same as the one submitted by Frontline back in February. A proposal which was similarly rejected at the time.

Since then, charter rates, asset values, and other conditions have changed in the sector, and DHT's fleet has, according to the board, "evolved significantly." Still, the board has reviewed the latest proposal, though reaching the same conclusion as last time.

"Following that review, we have unanimously concluded that your proposal continues to be wholly inadequate for DHT and its shareholders," writes the board.

Frontline responds

However, in a response to ShippingWatch, Frontline and CEO Macleod once again reiterates to the shareholders that they can get the best deal possible by accepting the offer made by the Fredriksen-controlled carrier.

"We calmly and stoically acknowledge the DHT letter, and I'm tempted to cite a famous quote by Ibsen: "The maddest starting point often leads to the most original result,"" he says in a comment to ShippingWatch, adding:

"The interesting is that DHT's executive management has now spent 12 days writing a response of close to 2,000 words in which they don't touch on what we and the other shareholders consider obvious in 2017":

"That the case must be presented to the shareholders. As simple as that. We're still noting strong support for our industrial and financial arguments. Our proposal maximizes the value for all shareholders, in both DHT and Frontline, and we believe that our solution will benefit both parties. We've received numerous calls from co-shareholders who are responding strongly to the procurator maneuvers by DHT, as they see them as being highly destructive to the values," he says, citing the DHT board's rejection of the proposal.



The letter from the DHT board of directors is addressed to Robert Hvide Macleod, CEO of Frontline, which is controlled by John Fredriksen.

"Woefully inadequate"

In Frontline's proposal, DHT's shareholders would get 0.8 Frontline shares per DHT share.

The board of directors points to several reasons for the rejection, including contribution and fleet value, as well as the fleet composition and potential for investment.

Meanwhile, the DHT board asks Frontline to not make any more similar proposals.

"Our hope is that – with a better understanding of the total inadequacy of your offer – we can all turn our focus to areas more productive for our respective businesses. For our part, we have instructed our management team to focus on its full-time job of running a great shipping company, for the benefit of our shareholders."

"The bottom line is that Frontline's proposed takeover of DHT is so woefully inadequate that we do not believe further engagement will result in a fair offer for the DHT franchise," writes the board.

Frontline and John Fredriksen have now made several attempts to acquire DHT Holdings this year. Frontline has also tried to go via the court to block the deal DHT Holdings made with BW Group, in which the latter sold its entire fleet of 11 VLCC supertankers for a major stake in DHT.

But this request was rejected, first in New York and later in the Marshall Islands.

English Edit: Daniel Logan Berg-Munch

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