Temasek bids loss-making NOL goodbye for $3.4b

The deal will be completed in mid-2016.

French shipping company CMA CGM has unveiled its $3.4b pre-conditional general cash offer for Temasek’s 67% stake in Singapore-based container shipping group Neptune Orient Lines (NOL).

Upon gaining approvals from antitrust authorities, CMA CGM will launch an offer at a price of $1.30 per share, which represents a 49% premium to NOL’s unaffected share price and a 33% premium to NOL’s 3 month volume-weighted average share price to July 16, 2015.

The offer comes after over two weeks of exclusive talks between CMA CGM and NOL. 

“The combination of NOL and CMA CGM will create a leading shipping company that delivers reliable and efficient service to its customers. Their complementary strengths will yield mutually beneficial results,” said Tan Chong Lee, Head Portfolio Management at Temasek.

The transaction is valuing NOL at a price to book ratio of 0.96 times. The transaction will be financed by a combination of available cash and bank financing provided by a syndicate of international banks. 

The boards of NOL and CMA CGM have unanimously approved the terms of the proposed transaction, which is still subject to the approval of the relevant anti-trust authorities as set out in the Pre-Conditional Offer Announcement.

The offer will be launched without delay after approval of the relevant authorities which is expected by mid-2016.