Smit turns down take-over bid

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

28 Feb 2008

Smit Internationale has rejected a joint bid by Saudi Arabia's Rezayat group and Dutch dredging giant Koninklijke Boskalis Westminster NV for its global oil and gas terminal services division. Boskalis and Rezayat had offered $300 million for Smit Terminals through the terminal business - the Lamnalco Group, which they jointly own. Smit board officials decided that its terminal operations were “part and parcel'' of a long-term 'corporate strategy' it is already committed to. Smit Terminals reportedly ''strongly benefits from synergies with the other Smit divisions'' and the offer has been deemed ''not to be in the best interest of the company and its stakeholders.'' Smit chief executive Ben Vree explained that the terminals division cannot be sold because Smit tugs and crew were also used in harbour towage and salvage operations (other Smit business units). Smit Terminals offers towage and pilotage services at its oil and gas facilities. According to Vree, rejecting the bid was not a ''matter of price'' as ''there are so many synergies between the different units that you can't tear them apart.''Boskalis spokesman Roel Berends had earlier said that the Lamnalco Group decided to bid for the Smit division on the back of a''booming terminals market, being driven by the energy and gas market.''The plan was to merge both terminal companies in a move which reports say would account for 40% of the global market for oil and gas terminal services with an annual turnover of more than $280 million. Berends has been quoted saying that the merger would ''create an absolute world leader with a 40% market share.''Boskalis and Rezayat officials said their bid was more than 20 times Smit Terminals' profit and some 10 times its EBITDA.