NOL

NOL: Disclosed that controlling shareholder Temasek entered into an exclusivity agreement with France's CMA CGM on a potential acquisition of NOL.

The exclusive agreement will last two weeks until the end of 7 Dec.

If the deal goes through, the combined entity will control an estimated 11.3% of the global fleet size, close to second largest Mediterranean Shipping Company, which has 13.4% of the world fleet.

The container shipping industry faced consolidation since 2008 due to the combination of excess capacity and a drop off in demand on the subprime blowout, which have led to cash burns in the industry.

Shares in NOL spiked 5.4% to a high of $1.18 in early trading, 14% discount to its NAV/share at $1.37.

Investors should note the potential risk if the deal does not go through, given that the counter has run up a steep 53% from its Aug low of $0.77/share.