OOCL 'a perfect bride-to-be': Drewry stokes M&A speculation
DREWRY Financial Research Services says it believes that CMA CGM of France is best positioned among the major carriers to be a perfect suitor for Orient Overseas (International) Limited (OOIL), the parent company of Hong Kong-based Orient Overseas Container Line (OOCL).
The investment research arm of London-based shipping research and consulting firm Drewry is further stoking speculation that OOCL might be an acquisition target, reported the American Shipper.
"There has been a lot of speculation in recent months in both the industry and financial circles on who's next in line to be acquired," Drewry said. "Orient Overseas (International) Limited has been the talk of the town and the stock has been in a strong upward trajectory in recent weeks."
It's not clear if that upward movement is because of merger and acquisition speculation or an expectation that strengthening freight rates will improve the financial outlook for container carriers.
Drewry said it believes, "A merger is likely in the near future. The key questions for us are: At what price would OOIL's shareholders be willing to sell? Would there be any willing buyers and, if yes, who? With freight markets improving, should OOIL wait for a better price?"
Drewry said it believes CMA CGM is "best positioned among major carriers to be a perfect suitor for OOIL." CMA CGM still has an appetite for more acquisitions. Despite its heavy debt burden, CMA CGM reportedly placed a bid for Hamburg Sud prior to the German carrier reaching a merger deal with Maersk late last year, Drewry said.
In addition, Drewry said it believes the likelihood of an Asian carrier bidding for OOIL is a distant possibility, noting that Evergreen is an unlikely bidder and COSCO is still emerging from its merger with China Shipping Container Lines.
While such speculation about the future of OOCL is interesting, any decision about the future of the company is firmly in the hands of the family of chief executive C C Tung, who holds a voting right for 68.7 per cent of OOIL's stock, according to its annual report last year.
OOCL did not immediately respond to a request for comment, and CMA CGM said, "As a matter of company policy, we do not comment on rumors or speculation."