AP Moeller-Maersk A/S, Denmark’s biggest company, plans to divest its holding in Danske Bank A/S as Chief Executive Officer Nils Smedegaard Andersen focuses on developing the oil and shipping businesses. Maersk stock rose the most in 18 months.
Maersk will dispose of its 20.05% stake in Denmark’s largest bank by distributing an extraordinary cash dividend to investors plus offering them the opportunity to buy Danske Bank stock, the company said in a statement Wednesday.
The holding is valued at about 35.8 billion kroner ($5.45 billion), based on Danske Bank’s closing price on Tuesday.
Since Andersen took over in 2007, Copenhagen-based Maersk has been selling divisions that aren’t part of its main businesses of container shipping, port operations, oil exploration and drilling. Disposals include its stake in a supermarket chain, an unprofitable shipyard and a stake in a ferry operator. The company has more than 1,000 subsidiaries.
“The box of chocolates has been opened and the goodies are coming out,” Matthew O’Keeffe, a London-based analyst at Berenberg Equity Research, said in a note, repeating a buy recommendation on Maersk.
“It suggests nothing is sacred within the Maersk portfolio and that a sum-of-the-parts valuation for this group is no longer merely a theoretical exercise.”
AP Moeller Holding, the family entity that controls 42 percent of Maersk, will buy a 15 percent stake in Danske Bank and may eventually obtain another 2.02% as part of an eventual target of 20 percent ownership, Maersk said.
The family’s decision cleared the way for the deal, which followed shareholders’ requests for awhile to sell the bank stake, Maersk Chairman Michael Pram Rasmussen said in the statement.
The company will announce the extraordinary dividend’s amount before the annual shareholders meeting on March 30.
“Over the last years we’ve been on a journey where we’ve tried to focus the company’s activities on the shipping and oil industries,” CEO Andersen said in a Bloomberg Television interview with Jonathan Ferro. “Danske Bank was not a core business.”
Maersk jumped as much as 8.1 percent to 15,070 kroner, the steepest intraday gain since Aug. 16, 2013, and was trading up 6.4 percent as of 11:44 a.m. in Copenhagen. The stock has risen 20% this year, valuing the company at 320 billion kroner.
Danske Bank fell as much as 2.2% and was trading down 0.6 percent at 175.7 kroner, reversing a gain earlier in the day.
Net income in 2014 surged 45 percent to $5.02 billion, Maersk said in a separate statement. Revenue rose 0.4 percent to $47.6 billion.
The oil-production unit reported a 2014 operating loss after tax of $861 million compared with a 2013 profit of $1.05 billion.
The division had a 2014 profit before writedowns of $1 billion, though this year’s results by that measure will be “significantly lower” as oil prices have plunged. The unit has a break-even point at an oil price of $55 to $60 per barrel, it said.
The oil division was Maersk’s biggest profit contributor in six of the eight years through 2013 as the company’s Maersk Line container-shipping unit struggled from excess industrywide capacity and declines in freight rates. Maersk Line’s operating profit after tax jumped 55% last year to $2.34 billion.
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