Singapore-based BW LPG has increased its all-stock proposal to combine with gas carrier owner and operator Dorian LPG, under which Dorian shareholders would receive 2.12 BW LPG shares for each Dorian share.
The revised proposal, which has been unanimously approved by the BW LPG Board of Directors, represents a value of USD 8.67 per share of Dorian common stock based on BW LPG’s closing share price of NOK 32.86 on July 6, 2018.
The total equity value of the transaction is around USD 479 million and the total enterprise value is USD 1.1 billion, including the assumption of net debt.
The revised proposal represents a premium of 25% to the closing Dorian share price on May 25, 2018, the last trading day prior to BW LPG’s initial proposal, of USD 6.96 per share and a premium of 19% to the long-term historical exchange ratio of Dorian and BW LPG since Dorian’s IPO.
“By increasing our offer at this time, we are reaffirming BW LPG’s belief that this transaction will deliver significant value to both companies’ stakeholders and that the time to act is now. It is evident from our discussions with Dorian shareholders that there is strong support for the companies to engage immediately regarding our proposed combination and capitalize on this compelling opportunity,” Martin Ackermann, BW LPG Chief Executive Officer, said.
BW LPG also announced its intention to nominate independent individuals to stand for election to Dorian’s Board of Directors at Dorian’s 2018 Annual Meeting of Shareholders.
In mid-June, Dorian LPG rejected the takeover bid from BW LPG, unveiled on May 29. The stock-for-stock transaction would have created an owner and operator of 73 vessels, including 70 VLGCs, and 3 LGCs, with an aggregate fleet capacity of 6 million cubic meters.
After consultation with financial and legal advisers, Dorian LPG’s Board of Directors decided that the USD 1.1 bn offer “undervalues Dorian on both an absolute- and relative-value basis”.
The new proposal is supported by BW Group, which owns 14.2% of Dorian and approximately 45% of BW LPG.