SIMIC

"It is our hope that, in light of this significant increase in value, the special committee will conclude that this transaction represents full, fair and certain value and is in the best interest of Atlas shareholders," said Poseidon Acquisition Corp, adding that it would withdraw if the offer was not acceptable.

The Poseidon consortium is composed of Japanese liner operator Ocean Network Express (ONE), Atlas chairman David Sokol, certain affiliates of Fairfax Financial Holdings and the Washington family and is ready to pay US$15.50 per share in cash to acquire all of the outstanding common shares of Atlas that it does not already own or control, up from its initial offer of $14.45 in August.

Fairfax, Washington and Mr Sokol collectively own more than 50 per cent of Atlas' outstanding common shares. Sokol said the increased bid would be Poseidon's final and best offer.

Poseidon said the financial markets have deteriorated significantly since it made its proposal on August 4, with the share prices of Atlas' closest peers in the containership leasing sector, Costamare, Global Ship Lease and Danaos, dropping by 15.9 per cent, 17.4 per cent and 21.8 per cent respectively, over the same period.

Citing Alphaliner data from August, the consortium warned that Cosco, Yang Ming and ONE, Atlas' top three customers which contribute over 60 per cent of its annual revenue, have in aggregate over one million TEU of capacity across 68 on-order vessels and that if demand continues to soften, they may use their own vessels.

It also pointed out that vessel charter rates continue to decline as the world recovers from Covid and recent supply chain disruptions, with the Shanghai Containerised Freight Index down 45 per cent from when the initial offer was made.

The letter cautioned that as container freight rates fall, liners and freight forwarders may not be able to cover vessel charter commitments, which may in turn result in re-negotiations or cancellations with containership lessors, as experienced by one of Atlas' peers in August 2022.