Investor urges NOL to seek other bids
Paulson & Co., Inc, a New York-based institutional investor that owns 6 percent of the shares of Neptune Orient Lines, has urged the Singapore-based company to seek competitive bids in addition to the one received from Singapore government agency Temasek.
“While the Temasek S$2.80 offer for NOL represents a premium to where the company’s shares had previously traded, we believe it is significantly less than what NOL would receive in an open auction process,” John Paulson, president of Paulson & Co., Inc, said in a letter to Cheng Wai Keung, chairman of NOL.
On Aug. 3, minority shareholder Temasek bid about S$2.8 billion ($1.6 billion) — or S$2.80 ($1.60c) per share — to buy the shares of NOL that it does not already own. Independent directors of NOL, the parent company of APL and APL Logistics, have since largely advised their shareholders not to accept the conditional cash offer made by Temasek
But Paulson & Co. argued in its letter that “merely rejecting the offer and not taking an active role facilitates Temasek’s ability to acquire NOL at the current offer price.”
“Furthermore, stating that no other competing offer has emerged as an indication of the fairness of Temasek’s offer fails to recognize the reluctance of potentially interested parties to enter a competitive bidding process without the invitation of the board,” the investor said. “Unless Temasek makes a compelling offer, we feel that it is incumbent upon the board to actively solicit other potential acquirers to ensure that NOL shareholders receive full value.”
Paulson & Co. believes that the S$2.80 offer of Temasek reflects a lower value multiple than similar completed transactions in the industry.
“We believe that numerous private equity firms and strategic shipping companies would be interested in acquiring NOL if the company were to solicit potential acquirers,” the investor said.
Citing the letter from Paulson & Co., NOL told the Singapore stock exchange that it has already considered all factors before giving its advice to shareholders. “This included the question of whether the company should solicit competitive bids, having regard to the fact that the company had not been approached by any person with an offer competing with the offer,” NOL said. The Singapore-based shipping group mentioned no plan to seek additional bids.
On the Singapore exchange earlier today, the NOL stock closed at S$2.82, the same as on the previous trading day and slightly above the Temasek bid price. The Temasek offer expires on Sept. 15.