• ITVI.USA
    15,845.180
    -15.980
    -0.1%
  • OTLT.USA
    2.806
    0.013
    0.5%
  • OTRI.USA
    21.590
    0.130
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  • OTVI.USA
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    -20.840
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  • TSTOPVRPM.ATLPHL
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  • TSTOPVRPM.CHIATL
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  • TSTOPVRPM.DALLAX
    1.370
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  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
  • ITVI.USA
    15,845.180
    -15.980
    -0.1%
  • OTLT.USA
    2.806
    0.013
    0.5%
  • OTRI.USA
    21.590
    0.130
    0.6%
  • OTVI.USA
    15,846.760
    -20.840
    -0.1%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
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  • WAIT.USA
    126.000
    0.000
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American Shipper

International Shipholding to respond to Liberty offer “in due course”

International Shipholding to respond to Liberty offer “in due course”

International Shipholding to respond to Liberty offer “in due course”

International Shipholding Corp. said late Tuesday its management and board of directors would review a buyout offer from Liberty Shipping Group LLC and “respond in due course.”

   The Mobile-based company was reacting to a letter sent to its board members earlier in the day in which a Liberty subsidiary offered to buy all of the outstanding shares of International Shipholding for $25.75, a premium of 27 percent over its closing price of $20.25 on Aug. 29 on the New York Stock Exchange. It said the cash offer “represents a total enterprise value of approximately $308 million.”



Shapiro



   Philip J. Shapiro, chairman, president and chief executive officer of Lake Success, N.Y.-based Liberty said the offer “is a very friendly approach to ISH’s shareholders. We are committed to working with ISH board of directors to sit down and quickly enter into a merger agreement.”

   “We believe that our proposal will deliver significant value to and be enthusiastically supported by your stockholders,” Shapiro’s letter said. “While our proposal is based on a review of publicly available information, we would be pleased to meet with you to consider any non-public information that may support an improvement to our proposal.”

   The letter adds, “We are also prepared to discuss with members of the Johnsen family the possibility of allowing them to roll over part of their existing interest in the company into equity of the combined company in a tax efficient manner.”

   Shapiro said a merger of the two companies would create “a stronger and more competitive entity, which would be better positioned for future growth in the U.S. and international seaborne transportation sector.”

   Combining the companies would “allow for an expanded geographic and client portfolio,” he said. “In the shipping market today you are seeing increasing numbers of consolidations for efficiency and to create a larger platform from which to grow your company.”

   Shapiro said if Liberty is successful, the combined company would be privately held, as Liberty is today. International Shipholding is listed on the New York Stock Exchange.

   “Being private allows more flexibility in determining what you do with your company and there are so many costs associated with being a public company that you do not have if you are a private,” he said.

   Shapiro who was a director of the public company OMI before it was sold to Teekay and Torm two years ago.

   “If you are a private company that is financially strong you don’t have the need to access the financial markets,” he said.

   Liberty is a private company owned by members of the Schnitzer family, the family that also owns the Portland, Ore.-based steel recycling company Schnitzer Steel, and other investors including Shapiro.

   Liberty and International Shipholding “are quite complementary to each other,” Shapiro said. “They have interests in PCTC (pure car-truck carrier) vessels as we do, bulk carriers as we do, we both operate U.S.-flag and foreign-flag vessels, and we are both Jones Act qualified companies. I would say the synergies are very much there.”

   According to an International Shipholding proxy statement filed with the Securities and Exchange Commission in March, members of the Johnsen family owned about 25.2 percent of the company’s stock and, “to the extent they act together, the Johnsen family may be deemed to be in control of International Shipholding Corp.” The same proxy listed six investment advisors who owned another 39 percent of the International Shipholding’s shares at that time.

   International Shipholding was originally founded as Central Gulf Steamship Corp. in 1947 by the late Niels F. Johnsen and his sons, Niels W. Johnsen and Erik F. Johnsen. The two sons retired, in 2003 and 2007 respectively, but remain members of the board of directors.

   Today, the company is run by their sons. Niels M. Johnsen is chairman and chief executive officer while Erik L. Johnsen is president. Niels M. Johnsen was not immediately available for comment.

   One source who knows members of the Johnsen family said they appear to like shipping and have given no indication that they want to exit the business.

   Shapiro said he has not met with the company since June when he talked to Niels M. Johnsen about a possible combination. After that meeting, at the end of July, Johnsen told Shapiro that after discussions with other members of his family, they decided “not to engage in a transaction with Liberty at that time,” according to an SEC filing by Liberty.

   Shapiro said Tuesday’s announcement “is a much more specific proposal.”

   Liberty has acquired a 5.5 percent stake in the company. Shapiro said he has not had discussions with shareholders other than the Johnsens about a possible merger.

   Liberty has owned and operated U.S.-flag and foreign-flag vessels since 1988 and has a fleet of six U.S.-flag dry bulk vessels. Liberty Shipping Group also operates a 2005-built PCTC, which is enrolled in the U.S. government’s Maritime Security Program, through Liberty Global Logistics LLC, its logistics subsidiary. Liberty Shipping Group also has two PCTCs on order to be constructed in Korea for delivery in 2009 and 2010.

   International Shipholding Group has a large and diverse fleet and has operated under brand names such as Waterman Steamship and Central Gulf Railway. Known for many decades as an operator of lighter-aboard-ship (LASH) vessels under both the Waterman and Forest Lines name, it got out of the LASH business over the past year.

   In its most recent annual report it said its fleet comprises six U.S.-flag PCTCs, four foreign-flag PCTCs, two breakbulk ships, three containerships, a tanker, a molten sulfur tanker, two rail ferries operated between Mobile and Mexico, a self-unloading U.S.-flag coal carrier, three roll-on/roll-off vessels that permit rapid deployment of rolling stock, munitions, and other military cargoes, and a half-interest in two capesize and two Panamax bulk carriers. The company said it sold interest in a Panamax bulker in June.

   International Shipholding had profit of $22.8 million on sales of $114 million in the first half of 2008.

   Jefferies & Co. Inc. is acting as financial advisor to Liberty and Gibson, Dunn & Crutcher LLP is acting as legal counsel. ' Chris Dupin

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