Grindrod Shipping (GRIN) – Grindrod Accepts Takeover Offer, Rating Lowered to Market Perform.

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Thursday, October 13, 2022

Grindrod Shipping operates a fleet of owned and long-term and short-term chartered-in drybulk vessels predominantly in the handysize and supramax/ultramax segments. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”), includes a Core Fleet of 31 vessels consisting of 15 handysize drybulk carriers and 16 supramax/ultramax drybulk carriers. The Company also owns one medium range product tanker on bareboat charter. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Grindrod Shipping Holdings Ltd. has entered into an agreement to sell its shares for $26 per share. Under the agreement with Taylor Maritime Investment Limited, Grindrod shareholders will receive $21 per share in cash plus a special dividend of $5 per share. The takeover terms match a proposal by Taylor Maritime announced on August 29, 2022. The offer is conditional upon Taylor receiving enough shares tendered so as to own more than 50% of the voting rights of Grindrod. With almost 40% of the common stock held by insiders, we believe the transaction will be completed as outlined. 

The shares of GRIN now trade near the takeover offer prompting us to downgrade the shares. The share of GRIN rose approximately 25% from the pre-offering price of $20.50 per share and are now trading near $25.50 per share. We believe the current stock price appropriately reflects present value of the offering price and the time needed to close the transaction. As such, we are lowering our rating on the shares of GRIN to Market Perform from Outperform.

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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 


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