Provider of maritime gas transportation services BW LPG is withdrawing its proposal to combine with gas carrier owner and operator Dorian LPG.
The decision comes due to “Dorian’s continued refusal to give a meaningful response to BW LPG’s outstanding proposal, engage in constructive two-way discussions, or schedule its annual meeting,” BW LPG said in a statement.
In connection with the withdrawal of its offer, BW LPG will also withdraw the candidates it previously intended to nominate to stand for election to the Dorian board at Dorian’s 2018 Annual Meeting of Shareholders.
Separately, Dorian LPG responded to BW’s withdrawal of merger proposal, stressing that the company “extensively engaged” with BW LPG’s team over the past few months to evaluate the offer. As explained by Dorian LPG, the proposal undervalued Dorian LPG on a relative net asset value, did not provide a premium to NAV, increased risk through high leverage, was highly dilutive to cash flow and imposed the burden of BW’s IMO 2020 compliance and BWTS capital expenditures on Dorian LPG shareholders.
Dorian LPG added that BW LPG was asked several times to improve its proposal but the company refused to do so.
“Dorian LPG’s Board, whose members beneficially own more than 25% of Dorian LPG’s stock, and Dorian LPG’s management are singularly focused on maximizing value for our shareholders,” the company pointed out.
In May this year, BW LPG proposed to combine with Dorian in an all-stock transaction, under which Dorian shareholders would have received 2.05 BW LPG shares for each Dorian share.
However, after the rejection of the initial proposal, the company increased its all-stock proposal to combine with Dorian on July 9, under which Dorian shareholders would receive 2.12 BW LPG shares for each Dorian share.