Frontline-Euronav arbitration could take "several months if not years"

Euronav also claimed CMB seeks to take control of Euronav on the cheap without paying the usual premium for a takeover or laying out a clear strategy for its future.

The company hosted a call for investors on February 27 to lay out its position on changes to Euronav proposed by shareholder CMB, and the reasoning behind its stance. The issue revolves around the merger of Frontline and Euronav which Frontline terminated in January. CMB resists the merger, while Euronav supports it.

CMB seeks to replace Euronav’s entire supervisory board with five appointees of its own choosing; Euronav has in response suggested a board comprising its current five members plus two appointees nominated by CMB and two more nominated by Famatown, a Frontline-aligned Euronav shareholder with a 25% stake in Euronav.

Euronav CEO Hugo de Stoop worked through the company’s objections to the CMB proposals and disputed some of the assertions made by CMB. The Euronav board is pro-growth rather than tied to the idea of a merger with Frontline, said de Stoop, and recent “tumultuous times” for Euronav that CMB seeks to solve were created by CMB’s opposition to the Frontline merger, he claimed.

CMB also said that Euronav is trying to force a merger through its arbitration with Frontline, whereas Euronav says it wants to know whether Frontline was within its rights to terminate the merger agreement. The emergency arbitration dismissed earlier this month made no judgement on the merits of the case, said de Stoop, and the ongoing arbitration into the facts of the matter could take “months if not years”.

De Stoop accused CMB of trying to take over Euronav through the back door and said CMB’s plans for Euronav were vague and its decarbonisation trajectory lacked specifics. On CMB’s strategy and intentions, de Stoop quoted a CMB investor call from February 15:

“Analyst: So I guess from your perspective, there’s just not something that you’re able or willing to say at this point of how you’re going to create that value. I think that really the question is how do you guys create incremental value?”

“Alexander Saverys, CMB CEO: Well, give us a seat on the board. And of course, we hope that we will be represented, and we will engage very soon to show how value can be created.”

Investors will vote on the CMB proposals in a shareholder meeting on March 23; Euronav encouraged all shareholders to exercise their right to vote on the proposals in the meeting, which include the replacement of the entire supervisory board.

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Frontline-Euronav merger arbitration could take "several months if not years"