tanker company will close its head office in Bermuda, the chief financial officer said yesterday.

Bermuda-registered Frontline Ltd., which is headquartered in Norway, yesterday signed an agreement to acquire LOF in a transaction valuing the company at $117.3 million. LOF's headquarters here is manned by chief executive officer Miles Kulukundis, chief financial officer Huw Spiers, financial controller Kate Blankenship, and a corporate secretary.

Mr. Spiers said once the tender offer was completed, and once details of the amalgamation were worked out, LOF's Bermuda headquarters would be closed. LOF has about 12 employees in London who operate the company's shipping business.

LOF kept its top employees in Bermuda to demonstrate to the tax authorities the company's "mind and management'' were outside of the UK, Mr. Spiers said.

Mr. Spiers said LOF's stock on the NASDAQ and London markets had been selling at a depressed price. The company considered options on how to raise the stock price and decided its equity value was too small for the market.

"We needed to be part of a larger entity,'' Mr. Spiers said. "With size you get a better share price, which cuts the cost of capital.'' Frontline is offering $1.591 per ordinary share, or $15.91 per American depositary receipt, for between 50.1 percent and 90 percent of LOF. Each depositary receipt consists of ten ordinary shares.

Once the target has been reached, Frontline said yesterday it would take control of LOF's board and then propose LOF took over Frontline through a stock-swap. The swap will enable Frontline to keep LOF's listings in the UK and the US.

LOF operates three Suezmax and three Panamax tankers in the crude oil and oil products trade. Frontline operates a fleet of 24 vessels. Frontline is also in a hostile takeover bid for Swedish shipping company ICB Shipping AB. If the bid succeeds Frontline -- controlled by Norwegian shipowner John Fredriksen -- will become one of the world's largest tanker shipping companies with a fleet of 41 ships. Mr. Spiers said charter rates for tankers had historically been depressed from an over capacity in the market since the boom in the early 1970s. Rates have been recovering slowly to "reasonably comfortable'' levels this year, he said.