The consortium bidding for Atlas Corp. has entered into a definitive agreement with the owner of Seaspan Corp., to go ahead with the planned acquisition.

Ocean Network Express (ONE), which is part of the Poseidon Acquisition Corp bidding to take Atlas private, announced the agreement on November 2, noting that the buyout will be an all-cash transaction.

The shipping line said earlier in October that Poseidon Acquisition Corp — composed of David L. Sokol, chairman of the board of Atlas Corp., certain affiliates of Fairfax Financial Holdings Limited, the Washington family, and ONE — continues discussions to acquire all common shares of Atlas Corp not controlled by consortium members.

US$10.9B all-cash transaction

"Ocean Network Express (ONE), together with partners forming Poseidon Acquisition Corp, has announced that they have entered into a definitive agreement with Atlas Corp, under which Poseidon will acquire Atlas in an all-cash transaction," ONE said in a brief statement.

Separately, Poseidon said the consortium will acquire Atlas in an all-cash transaction for an enterprise value of approximately US$10.9 billion.

It added that under the terms of the agreement, Poseidon will acquire all outstanding common shares of Atlas not owned by Fairfax, Washington and Mr Sokol for US$15.50 per share in cash.

Fairfax, Washington and Mr Sokol currently own approximately 68% of the outstanding common shares.

Meanwhile, Atlas will continue payment of all ordinary course quarterly dividends regardless of the timing of any closing.

Poseidon noted that the per share purchase price represents a 34% premium to Atlas’ unaffected share price as of August 4, 2022, the last trading day prior to a publicly disclosed proposal from Poseidon to acquire Atlas.

"We are pleased to have reached this agreement which, through the combination with Poseidon, introduces Atlas to an important corporate sponsor in the form of ONE," said Nicholas Pitts-Tucker, chair of the special committee of the board of Atlas.

"The agreement also provides Atlas' minority shareholders with a certain cash outcome due to be paid on closing, subject to the approval of a majority of the minority shareholders."

Pitts-Tucker noted that the announcement is the result of a comprehensive process in which the special committee, with the assistance of external financial and legal advisers, carefully considered Poseidon's proposal and other strategic alternatives available to Atlas.

Bing Chen, president and CEO of Atlas Corp signalled optimism about the transaction and the long-term prospects for Atlas.

"Atlas has continued to develop its long-term strategic partnerships and differentiated business model to position the Company for sustainable and quality growth. We believe this transaction with Poseidon is an exciting culmination of those efforts for our shareholders," Chen said.

The transaction is expected to close in the first half of 2023, subject to approval by holders of a majority of Atlas common shares not owned by Poseidon and its affiliates and certain closing conditions, including receipt of regulatory approvals and third-party consents.

Upon the closing of the transaction, Atlas common shares will cease trading on the New York Stock Exchange (NYSE).

Meanwhile, Atlas preferred shares will continue trading on the NYSE under current terms.

Following the completion of the transaction, Washington and Fairfax will own a majority of the equity of Atlas. Mr Chen will continue to serve as president and CEO of Atlas and will contribute his equity in Atlas to become an owner of the company along with Poseidon.