By Lisa Kerner
Charlotte, N.C., Aug. 6 - General Maritime Corp. and Arlington Tankers Ltd. will combine in a stock-for-stock deal, it was announced on Wednesday.
Both companies' boards of directors approved a definitive agreement that gives General Maritime shareholders 1.340 shares of the combined company for each share of General Maritime held, a joint news release said.
Shareholders of Arlington Tankers will receive one share of the combined company for each share of Arlington Tankers held.
Existing shareholders of General Maritime will own about 73% of the combined company with existing shareholders of Arlington Tankers owning the remaining 27%.
The transaction is expected to close in the fourth quarter of 2008, subject to shareholder approval.
An $11 million termination fee is included in the merger agreement, it was reported in a form 8-K filed with the Securities and Exchange Commission.
Together, General Maritime and Arlington Tankers are expected to generate revenue of approximately $353 million as well as a cash cost savings of about $7.5 million, the companies noted.
Highlights of the combination include:
• Significant contracted revenue stream: approximately $450 million of revenues contracted through 2013;
• Improved financial flexibility to invest in growth, with a cash dividend target of $2.00 per share annually; and
• Combined market capitalization of about $1.1 billion, as well as a combined enterprise value of about $2.0 billion.
The combined company will operate out of New York as General Maritime Corp. Shares will continue to be traded on the New York Stock Exchange under the ticker symbol "GMR."
"We believe the new company's large diverse double-hull fleet, combined with its balanced chartering strategy, will offer shareholders stable cash flows as well as upside potential to the products and crude tanker markets," General Maritime president and chief executive officer Peter Georgiopoulos stated in the release.
Georgiopoulos will lead the new company as chairman, stepping down as president and chief executive officer of General Maritime. Other key members of the management team will include John Tavlarios as president, Jeffrey Pribor as chief financial officer and John Georgiopoulos as executive vice president, treasurer and secretary.
Six current General Maritime directors and one director from Arlington Tankers will comprise the new company's board of directors.
General Maritime was advised by UBS Investment Bank. Jefferies & Co. advised Arlington Tankers.
Both General Maritime and Arlington Tankers ship crude oil products. New York-based General Maritime operates 21 tankers. Arlington, located in Hamilton, Bermuda, operates a newer fleet of 8 tankers.
| Acquirer: | General Maritime Corp.
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| Target: | Arlington Tankers Ltd.
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| Announcement date: | Aug. 6
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| Price per share: | General Maritime shareholders will receive 1.340 shares, and Arlington Tanker shareholders will receive one share of the combined company
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| Termination fee: | $11 million
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| Expected closing: | Fourth quarter of 2008
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| Stock price for acquirer: | NYSE: GMR: $24.21 on Aug. 5
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| Stock price for target: | NYSE: ATB: $19.71 on Aug. 5
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