logo
  Join        Login             Stock Quote

Nordic American Tanker (NAT) To Buy Scandic American Shipping

 December 17, 2012 07:40 AM
 


(By Balaseshan) Nordic American Tanker Ltd. (NYSE: NAT), an international tanker company, said it will buy 100% of the shares of Scandic American Shipping Ltd., its management company since 2004, for $25 million.

When Scandic began actively managing NAT eight years ago, NAT owned three vessels. Today NAT owns 20 vessels. Scandic is currently owned by a company controlled by Herbjorn Hansson, NAT's Chairman and CEO, and his closest family.

"NAT will continue its established long-term strategy. The NAT acquisition of Scandic will have no effect on the management of NAT in any way. I paid cash for Scandic when I acquired 100% of it in 2004 and thereafter from third parties. We will now convert most of our ownership in Scandic into NAT shares as a result of the current transaction," said Hansson.

[Related -Dividend Roundup: WHR, JBL, PEG, SWK, NAT, TLP]

Under its management agreement with NAT, Scandic has administrative, commercial and operational responsibility for NAT and is required to manage NAT's day-to-day business, subject to the objectives, decisions and policies of the NAT Board of Directors.

By acquiring Scandic, NAT will gain full control of all aspects of its operations. Two-thirds of the purchase price ($17 million) will be paid in shares and one-third ($8 million) in cash. The share component of the sale will be subject to a one-year lock-up, while the cash component will be used primarily by the seller to pay tax associated with this transaction.

The part that is payable in shares has been set at $8.90 per share which is above the closing price on the NYSE on Friday of $8.52 per share. Scandic is now expected to become a wholly owned subsidiary of NAT.

[Related -Nordic American Tanker (NAT) Posts Wider Than Expected Q4 Loss On Higher Expenses]

In addition to gaining full direct control of its operations, NAT will no longer be subject to the obligation to maintain Scandic's ownership of NAT's common shares at 2%. To the benefit of shareholders, this dilutive provision is thereby removed.

The NAT shares currently owned by Scandic are not a part of the transaction and will remain with the seller. Hansson has rescued himself from the Board deliberations surrounding the acquisition. The acquisition is expected to close in January of 2013.

"Our shareholding in NAT will increase from the present level and as large equity holders our interests will be further aligned with those of all shareholders. This increased shareholding in NAT is showing my continued strong support of the company and its policies. I plan to serve as Chairman and CEO for a good many years to come," said Hansson.

NAT closed Friday's regular session up 1.19% at $8.52. The stock has been trading between $8.15 and $16.04 for the past 52 weeks.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageIntegrated Device Technology Inc. (IDTI) Q1 Earnings Preview: Another Beat and Pop?

Integrated Device Technology Inc. (NASDAQ:IDTI) will issue first quarter 2015 financial results on July 28, read on...

article imageHerbalife Ltd. (NYSE:HLF) Q2 Earnings Preview: The Potential To Shock?

Herbalife Ltd. (NYSE:HLF) will release its second quarter 2014 financial results after the close of trading read on...

article imageHealth Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America

As of this keystroke, Health Net, Inc. (NYSE: HNT) shares are up around 4% on the day. The managed health read on...

article imageHomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?

HomeAway, Inc. (NASDAQ:AWAY) will report its financial results for the second quarter ended June 30, 2014 read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.