Saltchuk makes a new offer for OSG
Written by Nick Blenkey
Image: OSG
Privately held, Seattle-headquartered Saltchuk Resources Inc. has made a new offer to acquire NYSE-listed tanker and ATB operator Overseas Shipholding Group Inc. (OSG). Saltchuk, which is OSG’s largest shareholder, made an earlier offer to acquire the rest of OSG in June 2021 but suspended those discussions that September, citing pandemic-related market uncertainties.
Today, OSG confirmed that its board of directors had received an unsolicited non-binding indication of interest from Saltchuk for the acquisition of all of the outstanding shares of the company that Saltchuk does not already own for $6.25 per share in cash.
“Consistent with its fiduciary duties, OSG’s board of directors will be carefully considering and evaluating, in consultation with its financial and legal advisors, this indication of interest in due course,” said OSG, noting that it “does not intend to comment further on the unsolicited indication of interest or any related matters until its board of directors has determined that disclosure is necessary or appropriate.”
In its letter to the OSG board, signed by Saltchuk Holdings chairman Mark Tabbutt , Saltchuk says:
“We continue to believe Saltchuk would be an ideal long-term home for the company and therefore propose to acquire all outstanding shares of OSG that we do not already own for $6.25 per share, on a fully-diluted basis, in cash, which represents a premium of 5.9% to the closing price per share of $5.90 as of January 26, 2024; a 21.9% premium above the trailing 3-month volume-weighted average stock price of $5.13; and a 30.2% premium to the most recent privately negotiated share repurchase by OSG consummated on November 10, 2023 when the company acquired 1,425,000 million shares from Cyrus Capital Partners, L.P. at a price per share of $4.80. We believe that the proposed transaction maximizes value for all current stockholders of OSG.
“By its nature, shipping has multi-decade investment cycles and shorter-term economic cycles, both of which are better supported by a privately held family business versus being traded in the public markets. Saltchuk has the benefit of having significant experience and great confidence in the future of the Jones Act and the benefits it provides our country. In fact, over the last 20 years, Saltchuk has invested well over a billion dollars in new Jones Act vessels.
“Saltchuk has a strong culture of employee safety and environmental stewardship. With over 7,000 employees in our family of companies, we work hard to create a workplace where we would be proud to have our children work. We believe that OSG is a great cultural fit with Saltchuk, that our values are aligned, and we would be honored to support and welcome OSG’s employees into the Saltchuk organization.”
The privately held Saltchuk Group’s maritime operations notably include TOTE, which includes TOTE Maritime and TOTE Services, and Foss Maritime.
Saltchuk was formed in 1982, when eight investors came together to form a new partnership for the purpose of acquiring Totem Ocean Trailer Express. Over the years, further acquisitions followed. In the mid-1990s the company transitioned to primary ownership by one of the partners, Mike and Lynn Garvey. In 2009, Saltchuk became a family business when Mike and Lynn’s three daughters, Denise Tabbut, Nicole Engle and Michele Seaver, assumed the family’s majority ownership position. Michele Seaver passed away on April 26, 2019.
