Market Rife Merger Talk, NOL Says Not Yet

Maritime Activity Reports, Inc.

July 20, 2015

Image: Neptune Orient Lines (NOL)

Image: Neptune Orient Lines (NOL)

 As Singapore's sovereign wealth fund, Temasek, readied is to sell Neptune Orient Lines (NOL), the market has been rife with merger talk with Hong Kong's Orient Overseas International Ltd (OOIL) and Hamburg's Hapag-Lloyd being leading candidates.

NOL was in merger talks with Hapag-Lloyd back in 2008, but investors became gun-shy when the market crashed later that year. Japan's NYK and MOL have also been mentioned as suitors.
Some say a bid for NOL would make sense now, following the APL Logistics divestment, because MOL or NYK could buy the Singapore line without overlap with its substantial logistics operations. 
Lloyd's List commented like this: "To paraphrase Jane Austen, it is a truth universally acknowledged that a single container line in possession of a fortune must be in want of a suitor."
However, responding to media reports, NOL says there is yet no decision made to enter into any agreement to sell the company.
NOL said in a press statement that the company has noted “recent media reports regarding a potential sale of the Company.”
It added: “The Company is focused on returning its core liner business to sustainable growth and profitability. It has invested in 32 new and modern ships, continued to streamline its costs and, after the sale of APL Logistics, has a much stronger balance sheet. The Company has a duty to consider its options to maximize shareholder value as part of its conduct of normal business.
“The Company has not made any decision with respect to, and has not entered into any agreement for, a potential sale of the Company and there is no assurance that any agreement for the sale of the Company will be entered into.”
Shareholders of the Company and investors are therefore advised to exercise caution when dealing in their shares and other securities. The Company will release a further announcement if and when there are any material developments, it said.
The statement comes after media reports that Temasek Holdings, which owns nearly 67% of NOL, had put the loss-making shipping company up for sale.
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