Bloomberg has reported that shares of General Maritime Corp., the second-largest US oil-tanker owner, may not rise much further after Bermuda-based Frontline Ltd. (FRO)
raised its stake in the company and said it would seek talks to combine the businesses, JPMorgan Chase & Co. (JPM-PB)
said.General Maritime’s shares are trading at 12 percent more than $36.70, which is JPMorgan’s estimated net asset value for the company at the end of 2006, analysts Jonathan Chappell and Glen Muller said in a report last week. Net asset value is the market value of the company’s vessels less debt.
A takeover of General Maritime would be the biggest ever in the oil-tanker industry, based on today’s valuations. Frontline, the world’s biggest oil-tanker company by capacity, bought 3.76 million shares in General Maritime for $139 million between September 21 and November 30, according to a filing on Thursday with the U.S. Securities and Exchange Commission.
The Hamilton, Bermuda-based company now holds 3.86 million shares equal to a ten percent stake, the filing said.
Golar LNG Ltd. (GLNG)
, a Bermuda-based owner of ships carrying liquefied natural gas (LNGLF)
, won a five-year contract to provide three ships to Royal Dutch Shell Plc (RYDAF)
. The shares rose to a three-month high.
Shell Tankers Ltd. will charter the one-year-old Golar Viking and two new LNG ships slated for shipyard completion next year, Golar said in a statement on Friday. Shell International Trading and Shipping Company Ltd. will become technical manager of all three vessels. Financial details weren’t disclosed.
“This is very positive for Golar,” said Bjoern Giaever, an analyst at DnB NOR Markets in Oslo who rates the stock a “buy”, in an interview.
Golar, created by Norwegian billionaire John Fredriksen, has wagered $1.1 billion on liquefied natural gas since 2001, buying seven LNG tankers without first signing contracts for their use.
Three of the four tankers completed have had no long-term contracts generating income to cover their building costs.