Takeover 'joke'

Tanker market sources have panned a rumour on investor websites that Frontline plans to bid for Nordic American Tanker Shipping as nothing short of ludicrous.

Financial news service JAGfn reported that John Fredriksen's Frontline is rumoured to be planning a bid of around $40 per share for the Herbjorn Hanssen-led suezmax specialist.

John Fredriksen, who's not likely to be buying Nordic American.

TradeWinds' efforts to reach company representatives who would comment on the rumour were unsuccessful after business hours in Norway, where both companies' executives are based.

But tanker market sources responded to the rumoured $1.67bn potential bid with chuckles and derision.

"It's a joke," one said.

The rumoured bid price would be 42% higher than Nordic American Tanker's Friday afternoon price.

But it would be an even bigger premium on the company's net asset value, which investment bank Dahlman Rose reported at $16.74 per share.

After all, buying Nordic American for $1.67bn means paying $93m each for 18 suezmax tankers and newbuildings that the company owns or has committed to buy. But Nordic paid only $51.5m each for its latest two suezmax acquisitions.

Nordic American's shares have slipped by 2% so far Friday to reach $28.88 on the New York Stock Exchange.

Even participants on Yahoo.com's financial message board were incredulous.

One said the rumour is "baseless and unsubstantiated rubbish."

"If this turns out to be true, JF should be committed to the mental ward," the writer said, presumably referring to Fredriksen.

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