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DHT Holdings rejects second takeover offer from Frontline

John Fredriksen’s Frontline says that DHT Holdings has rejected an improved takeover offer while it moves to expand VLCC newbuild resale buys instead.

In its full year results announcement Frontline said DHT Holdings board of directors had rejected an improved offer of 0.8 Frontline shares for each DHT share. DHT had previously rejected an offer of 0.725 Frontline shares for one DHT share in an all share takeover bid.

“As DHT’s largest shareholder we are surprised that DHT’s Board has declined our repeated attempts to discuss a business combination that we believe is clearly in the best interest of all shareholders,” said Robert Hvide Macleod ceo of Frontline.

Frontline owns a 16.4% stake in DHT and merger would create the largest listed tanker company.

With repeated rejection from DHT Frontline has continued to acquire tonnage in the market to expand its fleet and is acquiring two VLCC newbuild resales from Daewoo Shipbuilding and Marine Engineering for $77.5m per vessel with delivery in September and October this year.

“We continuously evaluate various ways to expand our fleet and are pleased to have acquired two VLCC resales at historically low prices without adding to the size of the global fleet,” Macleod said.

Frontline reported a full year net profit of $117.5m for 2016 compared to $124.4m in 2015. Total revenues in 2016 increased to $745.3m compared to $458.9m a year earlier.

Looking ahead the company stated: “While capacity additions to the global tanker fleet are expected to put pressure on rates over the next 12 months, the company maintains a positive long term outlook on the tanker market.

“The company believes that the market will begin to tighten in 2018 as the delivery of newbuilding vessels abates and vessels are retired from the global fleet.”

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