THE sale of Oslo-listed Gram Car Carriers to the privately held Mediterranean Shipping Co for $700m would cull yet another shipping name from stock tickers, and represent the latest in a very long line of delistings due to privatisations or mergers.

MSC’s cash offer for GCC, which was unanimously approved by GCC’s board, comes only weeks after Star Bulk’s all-stock acquisition of NYSE-listed Eagle Bulk, and coincides with a bid by the privately held SaltChuk for NYSE-listed OSG.

New shipping names have been listed in recent years, mostly microcaps, plus a few larger entrants such as Zim, Himalaya Shipping and CoolCo. GCC is itself a newcomer, listing in 2022. But the overall trend is down in terms of the number of listed stocks, and significantly down in terms of aggregate market capitalisation.

More shipping companies are exiting the public arena than entering, and the departed have much larger market caps than the newcomers.

Different drivers for public-to-private sales

The GCC transaction is different from other public-to-private shipping deals in recent years.

It is a case of a stock being highly valued at the top of a sector cycle and a buyer paying peak pricing, akin to deals at the apex of the 2000s shipping boom such as OMI’s fleet sale to Teekay Tankers and Torm in April 2007.

Clarksons Securities analyst Frode Morkedal noted that car carrier market and asset values “are at all-time highs” by a large margin, GCC’s stock is in line with its net asset value, MSC is paying above GCC’s latest closing price, and GCC’s share price has never been higher.

“Gram is able to realise the fair value of the company at the peak,” said Morkedal.

The GCC sale dynamics starkly contrast with other public-to-private shipping transactions over the past decade, which have been driven by stock valuations that are too low.

Management teams opted for “take private” transactions because they felt valuations were better on the private side, and that public investors were undervaluing shipping shares, particularly with regards to revenue streams from long-term charters.

Long list of privatisations

Many the shipping names taken private over the past half-decade, including both shipowner stocks and container-equipment lessor stocks (which were popular among shipping investors), possessed long-term revenue streams from leases.

“If you look at what almost all of these companies had in common, generally speaking, they had assets with really long cash flows with high cashflow visibility,” said Stifel analyst Ben Nolan in an interview with Lloyd’s List in March.

“Almost all of these deals involved partnerships between a founding group or family and the private equity guys. There was a strong appetite among the infrastructure funds — the Blackstones and Stonepeaks of the world — to buy businesses that had really high cashflow visibility.”

The tally of public-to-private deals prior to the GCC offer announcement includes some of the former giants on the public shipping space:

• LNG carrier owner GasLog was delisted in June 2021, with Blackrock’s global energy and power division buying 45% and existing shareholders retaining 55%. GasLog then purchased separately listed GasLog Partners, which was taken private in July 2023.

• Oslo-listed Hoegh LNG was taken private by the Hoegh family and Morgan Stanley Infrastructure Partners in May 2021. NYSE-listed Hoegh LNG Partners was delisted and acquired by Hoegh LNG in September 2022.

• Teekay Offshore was acquired by Brookfield and delisted in January 2020. Teekay LNG was acquired by Stonepeak’s infrastructure fund and delisted in January 2022.

• Atlas Corp — owner of the world’s largest containership lessor, Seaspan — was sold to a consortium of company insiders and ocean carrier Ocean Network Express in March 2023. It had formerly been one of the most blue-chip shipping names on Wall Street.

• Seacor, which operates a diversified fleet including tankers and barges, was privatised in a takeover by American Industrial Partners and delisted in April 2021. DryShips was purchased by founder George Economou and delisted in August 2019.

• NYSE-listed Navios Holdings was bought by private sponsor Angeliki Frangou and delisted in December 2023. Oslo-listed BW Epic Kosan also delisted that month, taken private by shareholders J. Lauritzen and Nicholas Lykiardopulo.

All three of the formerly US-listed container equipment lessors were taken private. Textainer was delisted from NSYE on March 11, after being acquired by Stonepeak. Triton International — the world’s largest container-equipment lessor — was taken private by Brookfield and ceased trading in September 2023. CAI ceased trading in November 2021 after being bought by Mitsubishi HC Capital.

More stocks removed by public-to-public consolidation

Shipping stocks have also been disappearing over the past decade due to takeovers by other public shipping companies.

NYSE-listed Scorpio Tankers bought Oslo-listed Navig8 Product Tankers in September 2017. Gener8 Maritime sold its fleet to Euronav and International Seaways and delisted in June 2018. International Seaways took over Diamond S Shipping in June 2021.

More shipping stocks vanished as Frangou’s Navios Group shifted from a multi-listing, pure-play strategy to a single-listing, diversified-fleet approach. That change of direction led to the delistings of Navios Midstream (December 2018), Navios Acquisition (October 2021), and Navios Containers (March 2021) as vessels in those entities were consolidated under one banner: Navios Partners.

And most recently, Eagle Bulk’s stock ceased trading on NYSE on April 9 following the close of the takeover by Star Bulk.

Nolan believes the public-to-private shipping deals driven by infrastructure funds are largely played out. “Most of the owners with those long-term cash-flow positions are already gone.”

However, when asked whether the line-up of public shipping companies could be whittled down even further, he said: “The wild card is deals like Eagle Bulk being consolidated into Star Bulk. We could see more of those, where the smaller guys get rolled up into the bigger guys.”