Frontline announced an offer to the shareholders of ICB Shipping AB on September 1, 1997.
On the same day that the offer was publicly announced, ICB's Board of Directors advised their shareholders not to accept the offer. 'Aktiespararna' (a Swedish shareholder association) gave the same recommendation on September 3, 1997. The public criticism of the offer has to a great extent focused on the value of the Frontline share and the limitation of the cash offer to 25% of the total ICB-shares outstanding.
As a result of the public response and after talking to major ICB shareholders, it is Frontline's opinion that the offer in its current form will not reach the acceptance goal. In order to ensure successful completion of the offer, Frontline's Board has decided to adjust and improve the conditions of the offer. Frontline now offers SEK 115 per share for all of the outstanding ICB-shares, which is an improvement relative to the share offer valued at SEK 111.5 , based on Frontline's current share price of NOK 35.40. Frontline has secured sufficient bankfinancing.
Frontline's Board considers SEK 115 per ICB-share to be an attractive offer. The offer implies a 21% premium relative to the last publicly quoted ICB B-share trading price on August 28, 1997, the last trading day prior to the suspension of the share from the Stockholm Stock Exchange. Frontline has been able to purchase 23.1% of ICB's shares in the market, at prices below SEK 115 per share, indicating the generosity of the current offer.
Due to the improvement of the cash offer, Frontline's Board has decided to cancel the share offer. The public discussion and uncertainty tied to the share offer is thereby removed. Frontline's Board has furthermore concluded that due to the limited interest for the share alternative on the Swedish market, the basis for the planned secondary listing on the Stockholm Stock Exchange is not fulfilled. Furthermore, the offer is no longer subject to financing or to approval by Frontline's shareholders regarding the issuance of new Frontline shares to be exchanged for ICB shares.
The offer The current offer implies, adjusted for the above-mentioned changes, that for every ICB-share SEK 115 is offered in cash.
The offer is subject to the following conditions · that the offer is accepted to the extent that Frontline becomes the owner - directly or indirectly - of more than 90% of the total shares outstanding in ICB. Frontline, however, retains the right to complete the offer even at a lower acceptance level, and
· that the merger, in Frontline's view, is not prevented or complicated by law, court decision, by official action or by other circumstances beyond Frontline's control.
As stated earlier, Frontline will be positive to a completion of the offer, even at less than 90 percent acceptance, if the circumstances are deemed to be such that a long term combination of Frontline and ICB is feasible.
Preliminary time schedule Based on the adjusted conditions for the offer it is estimated that the time to completion of the offer will be shortened and will now be as follows:
Distribution of prospectus September 24, 1997 Subscription period September 25 - October 16, 1997
Information regarding compensation for the offer will be announced as soon as Frontline has announced that all conditions for the offer are satisfied or as soon as Frontline decides to complete the offer. Information regarding compensation will commence as soon as possible after such announcement or decision. Frontline reserves the right to extend the subscription period and delay information regarding compensation.
Frontline Ltd Board of Directors
Questions should be directed to: Mr. Tom E. Jebsen, CFO of Frontline Management, tel +47 23 11 40 00