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Shipper hooked by big fish

OSG of New York will pay $455-million to acquire Tampa's Maritrans in a deal to help expand its fleet of barges and tugs hauling oil and gas.

By STEVE HUETTEL
Published September 26, 2006

Tampa-based Maritrans Inc. has agreed to a $455-million takeover offer from a much larger petroleum product and crude oil shipper that wants to expand its U.S. presence.

Overseas Shipholding Group of New York on Monday offered an all-cash deal valued at $37.50 a share, a premium of 47 percent over the stock's closing price Friday.

The world's third-largest publicly traded oil tanker company, OSG is seeking to expand its business between U.S. ports, which requires U.S.-flagged ships manned by American seafarers.

OSG's combined U.S.-flagged business division would operate out of Maritrans' Tampa headquarters and report to current Maritrans chief executive Jonathan Whitworth, who will become a senior vice president of OSG.

Maritrans is a good fit for OSG's U.S. fleet, with different types of vessels and different trade routes, said OSG chief executive Morten Arntzen.

Though the deal means Tampa is losing a corporate headquarters, there is an upside. Employment at Maritrans' headquarters and other operations in Tampa should remain at about 60 or grow slightly, said officials at both companies.

"It won't be an expense-driven merger," Whitworth said in an interview Monday. "We're very growth-oriented, and we get to do it with the third-largest tanker company in the world - grow the fleet and use the same people, maybe more."

Officials expect to close the deal, which is subject to approval by Maritrans shareholders, by year's end.

OSG will proceed with an aggressive vessel-building plan undertaken by Maritrans. It includes construction of three tugs and matching barges for $235-million through the end of 2008.

The barges will be built at Tampa Bay Shipbuilding & Repair Co., the largest shipyard at Tampa's port. Work also will continue to rebuild at least two barges and possibly a third with double hulls, at $30-million each, at the local yard.

Whitworth said the deal started with a phone call from Arntzen about six weeks ago. No other suitors had contacted Maritrans, and Whitworth didn't expect any to try to outbid OSG.

OSG owns and leases a fleet of 88 ships, making it No. 2 among public tanker companies by the number of vessels and No. 3 by ship tonnage.

About 90 percent of the business is in shipping crude oil, various petroleum products and liquefied natural gas. OSG also operates a small fleet of U.S.-flagged tankers and has ordered construction of 10 more.

The acquisition of Maritrans will add 11 tug and barge units and four tankers that operate between gulf refineries and ports in Florida and on the East Coast.

In January, a Maritrans tug pulling a barge carrying 5.7-million gallons of heavy fuel oil ran into a storm off the North Carolina coast and sank, killing three crew members. The Coast Guard is still investigating what caused the accident.

Steve Huettel can be reached at huettel@sptimes.com or 813 226-3384.

[Last modified September 25, 2006, 23:14:26]