Shipping Shipping Finance

Hapag-Lloyd ownership: Klaus-Michael Kühne overtakes Luksic family

Battle for control of German carrier nearing truce as shares skyrocket and free-float shrinks

Hapag-Lloyd, the world’s 5th largest container shipping operator and one of the leaders in the Latin American market, has witnessed 2019 as the year of spectacular share appreciation. The company’s stock (ETR:HLAG) is up 227,68% year-to-date.

Image credits: Hapag-Lloyd 9M 2019 Result Presentation

Although the German carrier has been posting excellent results over the last few quarters, the company’s two largest shareholders are also to be blamed for the dramatic share spike.

Mr. Klaus-Michael Kühne from Germany and the Chilean Luksic family are the controlling partners of Hapag-Lloyd, together with the city of Hamburg (through its holding HGV). Other relevant stockholders are Qatari (QIA) and Saudi (PIF) State-backed funds, who came onboard when Hapag-Lloyd merged with Kuwait-headquartered United Arab Shipping Company (UASC) back in 2017.

HGV, QIA and PIF did not change their positions over the second and third quarters of 2019. Mr. Kühne (via two of his companies) and the Luksics (via CSAV) did. Although both parties seem to cooperate amicably as major shareholders, the idea of raising their stake in the company has occurred to them both.

As a result, Hapag-Lloyd’s liquidity has endured heavy and sustained pressure. In 2015, after the shipping line’s IPO, free float was 15,5% and the stock was priced at EUR 20. By September 30 this year, free float was down to 4,5%. Yet, any minority shareholder who remained onboard throughout this time could not complain. With the current price at EUR 73,40, the stock has appreciated 267% since it went public.

But who won the war? It may be too soon to tell, but Mr. Kühne leads the pack for now. After closing the second quarter behind at 26,2% versus 27,5% of CSAV, by the closure of the third quarter, his holdings stood at 29,2%, while CSAV lingered at 27,8%.

Image credits: Hapag-Lloyd 9M 2019 Result Presentation

It might very well be that CSAV has thrown the towel after deeming the current price too high for further escalation. And the thin free float has began to raise discontent. At the company’s conference call earlier this month, two analysts raised the issue during the Q&A session. Hapag-Lloyd’s CEO, Rolf Habben Jansen, replied: “it’s good and positive that our big shareholders are committed to Hapag-Lloyd. Of course, the company would like to have a somewhat bigger free float if we look mid-term. But at the moment, there’s not that much that we can actually do to influence that”.

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