Yangzijiang Shipbuilding to buy 10% Poseidon stake for $1.05b in cash

CEO Ren Letian is separately buying a 5% stake through his private investment vehicle.

Yangzijiang Shipbuilding (Holdings) Ltd. has signed definitive agreements to acquire a 10% equity interest in Poseidon Corp. for an aggregate consideration of $1.05b (US$825.7m).

The purchase involves approximately 29.18 million shares and will be funded entirely from the company’s internal cash resources, according to a bourse filing.

The stake is being acquired from certain affiliates of Fairfax Financial Holdings Limited and certain affiliates of the Washington Family.

The acquisition is being effected under two conditional share purchase agreements dated 10 March with the vendors and Poseidon.

An independent valuation by Kroll (HK) Limited had placed the 10% stake at between $840.4m (US$660.6m) and $1.03b (US$810.9m).

The transaction is part of a larger deal in which up to 34% of Poseidon is being sold to multiple investors.

Separately, Hengyuan Asset Investment Limited, a private investment vehicle owned by Yangzijiang’s CEO, Ren Letian, is acquiring a 5% stake.

Poseidon, a Marshall Islands corporation, is the holding company of Seaspan Corporation Pte. Ltd., which is incorporated in Singapore.

Following completion, Yangzijiang will gain one board seat at Poseidon and customary minority protection rights, including rights of first refusal and tag-along rights.

($1 = US$0.79)