Overseas Shipholding Group, Inc. OSG shares are trading higher after the company announced it entered into a definitive merger agreement to be acquired by Saltchuk Resources.
The transaction is valued at an aggregate equity value of around $653 million and a total transaction value of $950 million.
As per the terms, Saltchuk will commence a tender offer to fully acquire Overseas Shipholding it does not already own for $8.50 per share in cash.
The purchase price represents a 61% premium to Overseas Shipholding’s 30-day volume-weighted average price on January 26, 2024, the last day of trading before Saltchuk disclosed its non-binding indication of interest, as well as a 44% premium to the January 26 closing price of OSG’s shares and a 36% premium to Saltchuk’s initial indicative price of $6.25 per share.
The closing of the tender offer, which is subject to customary closing conditions, is expected to close in the next few months.
Post deal closure, Overseas Shipholding will operate as a standalone business unit within Saltchuk.
Sam Norton, OSG’s President and Chief Executive Officer, said, “We are excited to enter into this new chapter together with Saltchuk, which has been a significant shareholder of OSG over the past several years and has a close understanding of our business.”
“Saltchuk’s operating companies have distinguished themselves in their respective segments, and this transaction partners us with an organization that shares our values and focus on customers. We are thrilled to soon join the Saltchuk family of companies.”
Price Action: OSG shares are up 22.6% at $8.41 premarket at the last check Monday.
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