A consortium made up of a controlling shareholders of NYSE-listed Atlas Corporation (ATCO) and Japanese container carrier ONE have made non-binding offer for the full buyout of the asset manager at a 30% premium over its share price prior to the announcement.
Atlas Corporation’s portfolio includes Seaspan Corporation, a containership leasing company, and APR Energy, which provides mobile power plants to underserved markets and industries. Seaspan’s fleet consists of 131 containerships and another 70 under construction, representing over 1.95M TEU on a fully-delivered basis.
The consortium is made up of David Sokol, Chairman of the Board of Directors of Atlas Corp., certain affiliates of Fairfax Financial Holdings (TSX: FFH and FFH.U), the Washington Family, and Ocean Network Express (ONE), the world’s seventh largest container shipping company.
They are offering $14.45 per share in cash for all shares they do not already own or control, representing a 32.1% and 28.8% premium over the 30-day and 60-day average closing prices of ATCO shares. ATCO shares rose more than 20% in after hours trading on the news.
The offer was submitted as a non-binding proposal sent to Atlas’ Board of Directors on Thursday.
Fairfax, the Washington Family, and David Sokol currently own or control approximately 68% of the fully-diluted outstanding common shares of Atlas and would continue their ownership as part of the consortium. As such, the proposal would not result in a change in control of the company.
The consortium members have committed to fully fund the cash component of the proposal, and as planned all of Atlas’ preferred shares would remain outstanding following the proposed transaction.
“The Consortium believes the proposed transaction will provide Atlas’s common shareholders with immediate liquidity and certainty of value at a significant premium to the current share price, while allowing Atlas to focus on the long term without the emphasis on short-term results and providing Atlas with an ideal strategic partner to support its future growth,” said Sokol.
Under the proposal, Atlas’s board of directors would form a special committee of independent directors to review and accept or reject the proposal andconsider and negotiate the terms. The special committee will also select and retain independent legal and financial advisors to assist in its review.
The proposal will be subject to a non-waivable condition requiring approval by holders of a majority of Atlas common shares not owned or controlled by the consortium, senior management or their affiliates.
In its proposal letter, the consortium informed the Atlas board that consortium members who are currently shareholders are interested only in acquiring the remaining common shares, and have no interest in selling any of the shares, nor would they expect to vote in favor of any alternative sale, merger or similar transaction in their capacity as shareholders.
If the special committee does not approve, or other common shareholders of Atlas do not approve, the proposed transaction, Fairfax, the Washington Family, and David Sokol intend to continue as long-term shareholders of Atlas.
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