Description

Silja, based in Finland, owns and operates a fleet of passenger and cargo ships in the Baltic Sea. This investment is simply an arbitrage and does not require much description of Silja's operations and finances. In April 1999, Sea Containers Ltd., based in Bermuda, acquired a 50% interest in Silja for $102.8 million. The shareholders who sold the shares to Sea Containers have a put option to sell their remaining shares - which represent 26% of shares outstanding -- to Sea Containers in April 2002 (three years after the initial transaction) at the price of EUR 2.52 per share. This amount is payable at Sea Container's option in cash or Sea Container (class A) shares. From my very limited knowledge of Finish securities law, the block sale of 26% of outstanding shares to Sea Containers will push Sea Containers beyond an ownership threshold that will require Sea Containers to tender for all company stock at the same price (EUR 2.52) as the block trade.

Catalyst

Sea Containers Ltd. may be forced to tender for all Silja stock at EUR 2.52 (or a 112% premium to the current price) in April 2002.