Investors Cool on Adsteam Bid

July 5, 2006

Institutional shareholders of tugboat company Adsteam Marine remained mixed about the recommended $700m all-cash takeover offer from Danish shipping giant AP Moller-Maersk. Analyst Alexander Mees of JP Morgan said some smaller investors were happy with the takeover bid, but larger shareholders believed Adsteam was worth far more, fuelling hopes that a higher bid might be in the making. Adsteam shares remained unchanged at $2.57 - slightly higher than the $2.54-a-share cash bid lodged by salvage company SvitzerWijsmuller, a subsidiary of Maersk. Adsteam's largest shareholder, Investors Mutual, said that while the offer represented a healthy premium, it was still below replacement value of Adsteam's 200 tugboats. It is said that analysts believed that a higher bid might emerge from other global tugboat operators including Hong Kong conglomerate Hutchinson-Swire, Dutch-based Smit and Singaporean port operator PSA. Another major shareholder with a 9 percent stake in Adsteam said that while it was a reasonable offer, there was room to move. Under the terms of the Danish bid, Adsteam has given an undertaking not to seek rival bids and would have to pay a break fee of $6.9 million if directors backed a rival offer. The Danish offer is also subject to several conditions, including competition approvals in Australia and Britain, and Foreign Investment Review Board approval. Source: The Australian

Investors Cool on Adsteam Bid

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