Shares jump as NOL reveals exclusive talks on acquisition

SINGAPORE — Shares in Neptune Orient Lines (NOL) yesterday surged to their highest in almost seven months, after the container shipping giant said at the weekend that it is in exclusive talks for a potential acquisition by France’s CMA CGM.

NOL shares rose by as much as 6.25 per cent to S$1.19, the highest intraday level since April 29, before giving up some gains on late profit-taking to end at S$1.17, or a 4.5 per cent increase. The closing price values NOL at just over S$3 billion. Turnover was heavy, with nearly 42 million shares changing hands, making it the fourth most actively traded counter on the Singapore Exchange.

NOL, whose ships operate under the APL brand, said on Saturday that its biggest shareholder — part of Singapore investment fund Temasek Holdings — had granted CMA CGM exclusivity “with respect to a potential acquisition of NOL by way of pre-conditional voluntary general offer”. CMA confirmed NOL’s statement on Sunday. If consummated, the deal would bring the French shipper close in size to Mediterranean Shipping Company (MSC), the market No 2.

The announcements follow NOL’s previous disclosure on Nov 7 that it was in talks with both CMA CGM and Denmark’s AP Moller-Maersk — owner of Maersk Line, operator of the world’s biggest container ship fleet — over a potential sale. Maersk declined to comment on why it had pulled out of contention to take over NOL.

CMA CGM, which is privately held and controlled by the Marseilles-based founding Saade family, said that if the discussions led to an agreement, the combination would contribute to the consolidation of container shipping at a time when scale was more critical than ever.

“It would further reinforce CMA CGM as a global force in container shipping, leveraging the strong geographic and operational complementarity of both groups,” said the company.

According to Alphaliner, the Paris-based shipping information service, APL controls 2.7 per cent of the world container shipping fleet, while CMA CGM operates 8.8 per cent. The combined company would be far closer than at present to MSC’s 13.4 per cent of the world fleet.

Container shipping lines have been struggling to cope with excess capacity from shipping lines’ ordering of vast, more efficient new vessels and a worldwide slowing of demand. NOL reported a US$95.6 million (S$135.6 million) net loss for the third quarter, as revenue plunged 28 per cent to US$1.2 billion. FINANCIAL TIMES