It is rumored that ZIM may be fully privatized
Jefferies, an American investment bank, disclosed in a research report on August 11 that Eli Glickman, the CEO of ZIM, is collaborating with Israeli shipping tycoon Abraham Unger to jointly promote the acquisition of 100% of ZIM's equity. The total transaction price is approximately 2.4 billion US dollars, with an offer price of about 20 US dollars per share.
This means that if the deal is concluded, ZIM Lines may be fully privatized and delisted from the stock exchange.
This is the second time since March this year that similar rumors have emerged about ZIM. Zim's management reaffirmed its previous position, stating that it "will not comment on market rumors."
However, Omar Nokta, the chief analyst of Jeffery Shipping, is cautious about this deal, believing that it will be difficult to materialize as investors may demand a higher premium.
Omar Nokta explained: "Privatization transactions need to meet double thresholds." First, all the shares to be offered for acquisition must be accepted by more than 95% of the shareholders, and the merger plan must also be approved by the Israeli government.
Relevant financial data shows that ZIM currently holds 3.42 billion US dollars in cash. Even after paying a final dividend of 471 million US dollars for the fiscal year 2024, its cash reserves still reach 2.95 billion US dollars (equivalent to 24.5 US dollars per share), which is higher than its market value.
Jefferies pointed out that due to the operating unit cost being as high as $1,900 per TEU (the industry average is about $1,300), its share price has long been lower than its cash holdings.
Omar Nokta emphasized that although ZIM's high cash reserves serve as a buffer to offset the risk of high costs, debt-driven privatization could endanger the financial structure. He further believes that although the current outlook for the container shipping market is unclear and its valuation is low, given its profit and dividend record, the premium demanded by investors may be higher than the current rumored level.
It is reported that on January 27, 2021, ZIM Shipping announced its successful listing on the New York Stock Exchange (NYSE) in the United States, with an initial public offering (IPO) of 14.5 million common shares at a price of $15 per share. Citigroup, Goldman Sachs Group and Barclays Bank served as the global coordinators for this issuance at that time, while Jefferies and Clarksons jointly acted as bookrunners.
Zim also became the first shipping company to successfully go public in the United States in the past five years at that time.
This means that if the deal is concluded, ZIM Lines may be fully privatized and delisted from the stock exchange.
This is the second time since March this year that similar rumors have emerged about ZIM. Zim's management reaffirmed its previous position, stating that it "will not comment on market rumors."
However, Omar Nokta, the chief analyst of Jeffery Shipping, is cautious about this deal, believing that it will be difficult to materialize as investors may demand a higher premium.
Omar Nokta explained: "Privatization transactions need to meet double thresholds." First, all the shares to be offered for acquisition must be accepted by more than 95% of the shareholders, and the merger plan must also be approved by the Israeli government.
Relevant financial data shows that ZIM currently holds 3.42 billion US dollars in cash. Even after paying a final dividend of 471 million US dollars for the fiscal year 2024, its cash reserves still reach 2.95 billion US dollars (equivalent to 24.5 US dollars per share), which is higher than its market value.
Jefferies pointed out that due to the operating unit cost being as high as $1,900 per TEU (the industry average is about $1,300), its share price has long been lower than its cash holdings.
Omar Nokta emphasized that although ZIM's high cash reserves serve as a buffer to offset the risk of high costs, debt-driven privatization could endanger the financial structure. He further believes that although the current outlook for the container shipping market is unclear and its valuation is low, given its profit and dividend record, the premium demanded by investors may be higher than the current rumored level.
It is reported that on January 27, 2021, ZIM Shipping announced its successful listing on the New York Stock Exchange (NYSE) in the United States, with an initial public offering (IPO) of 14.5 million common shares at a price of $15 per share. Citigroup, Goldman Sachs Group and Barclays Bank served as the global coordinators for this issuance at that time, while Jefferies and Clarksons jointly acted as bookrunners.
Zim also became the first shipping company to successfully go public in the United States in the past five years at that time.
