NOL buy stacks up in several ways
Hong Kong
THE latest round of consolidation in the shipping industry should stack up. CMA CGM, the French group that is the world's third-biggest container carrier, has agreed to buy Singapore's ailing Neptune Orient Lines (NOL) for US$2.4 billion plus debt. The price offered to majority backer Temasek and NOL's public shareholders looks generous. Still, the unlisted buyer can chart a course to a financial payoff.
Billionaire Jacques Saade's group is paying S$1.30 a share, a 49 per cent premium to NOL's price before deal rumours leaked in July. That's a hefty mark-up versus other takeovers of Singaporean listed groups: Credit Suisse analysts say premiums have averaged 15 per cent in the last three years. A valuation of 0.95 times book value also looks full for a challenged industry.
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