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Tallink shares drop 12 percent following Friday's announcement

MS Megastar's maiden voyage on Jan. 29, 2017.
MS Megastar's maiden voyage on Jan. 29, 2017. Source: (Andres Raudjalg/Tallink)

Shares of listed Estonian shipper Tallink Grupp fell over 12 percent on Monday following the company's announcement of Friday evening that it is terminating the exploratory process related to potential strategic options for the company.

Following the opening of the Tallinn Stock Exchange on Monday morning, shares fell 12 percent, and an hour after the start of trading were trading at a price of €1.065. Turnover during the first hour totaled approximately €500,000.

Immediately following the closing of the stock exchange on Friday, Tallink told Nasdaq Tallinn that it had decided to terminate the exploratory process launched last July in relation to potential strategic options for the company.

"In the course of the process, various strategic options were considered with the purpose of supporting the long-term strategy and development of the company," read the company's disclosure on Friday. "The company will take the proposals and feedback received during the process into account in further planning and development of its business."

Enn Pant, chairman of Tallink Grupp's supervisory board and shareholder of Tallink's core owner Infortar, said on Friday that Infortar never planned on selling its holding in Tallink. The termination of the exploratory process related to potential strategic options for Tallink does not mean that the process has failed, he added; the options defined by the adviser will continue to be considered at the company.

Last July, Tallink announced that its supervisory board has resolved to begin a process in which new core investors may be added to the company's circle of owners, while some of the existing shareholders may divest their shares. It said that the supervisory board had decided to launch an exploratory process relating to potential strategic options for the company. Citigroup Global Markets was appointed as the financial adviser for this process.

The strategic options under consideration must support Tallink's long-term strategy and can be linked with involving new core investors for the company, which can result in some of the existing shareholders divesting their shares, whether by way of a voluntary or mandatory take-over offer for the company or otherwise, it said.

The company also announced that current Secretary General of the Ministry of Culture and Reform Party member Paavo Nõgene will take over as Tallink's CEO this May.

Nõgene is taking over from Janek Stalmeister, who will continue as a member of the group's management board.

Before his time at the Ministry of Culture, Nõgene served as director of Tartu's Vanemuine Theatre, prior to which he worked in a number of private businesses. He is also a member of the supervisory boards of Estonian Public Broadcasting (ERR) as well as several cultural institutions across Estonia.

Tallink closed at €1.215 on Friday. Last July, when Tallink announced the process of finding strategic options, its shares stood at €0.95.

Editor: Aili Vahtla

Source: BNS

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