Grimaldi Group plans to purchase remaining Finnlines shares

Italian concern now owns 46 percent of Finnish shipping company

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The Italian shipping group Grimaldi announced on Tuesday its plans to make an offer for the remaining shares of the Finnish shipping company Finnlines. The announcement came soon after Grimaldi had acquired a further 10.8-per cent stake of the company from the Finnish investment group Thominvest and its principal owners the family Jouhki. The purchase increased Grimaldi's share in Finnlines to a total of 46.2 percent.
      Grimaldi's intent to become the principal shareholder at Finnlines has been evident for some time. Last summer the Laine family sold their Finnlines stock to the Italians, followed by Nordea Bank in early September.
      The shares from the Laine family alone increased Grimaldi's stake in Finnlines to more than 30 per cent, which obligated the Italian group to present a bid to the rest of the Finnlines shareholders.
      According to law, the Grimaldi Group would have had three years to make the offer, or alternatively to drop their stake below the critical 30 per cent mark.
     
The only element of surprise in Tuesday's announcement was its timing. It came surprisingly quickly. Grimaldi plans to carry out its intention and make a formal offer to the rest of the shareholders before the end of October. The shareholders will then have five weeks to respond.
      Grimaldi has offered to pay EUR 15.95 per share, which exceeds the 12-month volume-weighted average price of a Finnlines share by nearly eight per cent.
      Finnlines President and CEO Antti Lagerroos says the company's Board of Directors will respond to the Grimaldi offer once it has been officially presented. The Board of Directors will at least express their view on the offered price.
      In Lagerroos's view the offer by Grimaldi was to be expected. "The buyer is interested in Finnlines in its entirety. Above all they are interested in know-how."
      The Naples-based Grimaldis are an old shipowning family. The Grimaldi Group was established in 1945 and has since become one of the most prominent privately-owned shipping companies on the seas. The group owns one of the largest and most modern fleets of purpose-built Ro-Ro and car-carrying vessels in the world.
      The Grimaldi Group owns no fewer than 55 of the vessels in its use. The group offers regular transportation services in Northern Europe, the Mediterranean, West and Central Africa, plus North and South America.
     
Finnlines operates primarily in the Baltic Sea, so there will be no overlapping with the group's other arms. Grimaldi has earlier told the Finnish economic journal Talouselämä that it would keep Finnlines as a separate company.
      At present, the profitability of Finnlines does not match that of the Grimaldi Group. However, the Italians recognise the growth potential in the Baltic Sea transportation related to the enlargement of the EU and the improving economic situation in Russia.
      One of the most interesting sectors from the buyer's point of view is transportation of cars to Russia, and maybe one day in the opposite direction.
      Even in Finnlines' own operations Russia has received more emphasis of late. Nowadays, Finnlines runs services from Germany to St. Petersburg both directly and via Kaliningrad. However, the company's core business is still the Finnish export industry shipments for which it was originally set up.
      After Grimaldi, the largest Finnlines shareholders are the pension insurance company Ilmarinen and the forestry company Stora Enso.
      The persevering finance investor Ilmarinen has already announced that the price quoted by Grimaldi is unsatisfactory, and that there will be no deal at that price.
      Stora Enso, which in principle is trying to rid itself of operations outside its core business activities, is yet to respond to the Grimaldi announcement. Captions (first pic in HS.fi):


Previously in HS International Edition:
  Finnlines order new vessels from Italy (20.2.2004)

Links:
  Finnlines
  Grimaldi Group

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