M&A situations tend to be rather like putting a jigsaw puzzle together. The analogy works well in the sense that one normally has all the pieces at hand, even if it might not appear to be the case at the time. In the case of what may happen next at Scorpio Tankers (STNG), the stage was set for M&A earlier this year in March with the announcement that CMB.TECH had acquired a 40.8% stake in Golden Ocean Group.
The company, owned by billionaire John Friedriksen, the man who has famously announced he is leaving the high tax UK, is now in position to make his next move. Although he may be leaving this country, City of London figures would regard him as being one of as many of three obvious contenders to make a move on Scorpio Tankers.
This is especially so given that CMB.TECH is making sure that Golden Ocean will be all cashed up, as is Friedriksen after that deal.
Therefore, it can be seen that recent events have created something of a domino effect as far as the M&A prospects for undervalued and under-rated Scorpio Tankers. This is because John Fredriksen is the owner of fellow crude oil transportation company Frontline Shipping (NYSE:FRO). It has a $4bn market cap, and therefore the $2bn market cap of STNG currently is perfectly doable as far as a deal would be concerned. FRO itself announced a decent refinancing in February, $512m sale and leaseback, something which gives it the scope to considering having peer Scorpio in its sights.
You can read yesterday’s first article on Scorpio Tankers: HERE
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