Anatomy of a Front Runner

by Matt McCleery and Nicolai Heidenreich

Armed with a limp share price and a lousy market and backed by a balance sheet and a battalion of devoted bankers, John Fredriksen and his three-man Frontline army continue to win strategic battles in their effort to build a pure play public tanker vehicle with enough liquidity and a large enough market capitalization to attract a broad range of institutional investor interest.

In the following analysis, we will use Frontline’s recent victory against ICB, won by attrition, as an opportunity to examine the multi-billion dollar experiment that Frontline is conducting before the eyes of the shipping world. By charting the waypoints on Mr. Fredriksen’s voyage, we will argue that his success comes down to four critical factors; (1) his belief in market consolidation and the benefits of scale; (2) his balance sheet engineering; (3) his willingness to use personal resources when necessary and; (4) his enthusiasm for heretofore unseemly transactions such as hostile takeovers.

This is only an excerpt of Anatomy of a Front Runner

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