The board of Stamford shipping company Dorian LPG has unanimously rejected an unsolicited, conditional $1.1 billion acquisition proposal from one of the world’s largest liquefied petroleum gas (LPG) shippers, Norway’s BW LPG.
In explaining its decision, Dorian’s board said the BW LPG proposal presented late last month undervalued Dorian on both an absolute- and relative-value basis. Dorian Chairman, President and CEO John Hadjipateras further outlined the board’s rejection in a letter to BW LPG Chairman Andreas Sohmen-Pao, which maintained that the offer:
- Failed to recognize the value of Dorian’s “younger, more fuel-efficient ships”;
- Failed to recognize Dorian’s “superior commercial performance”;
- Forced shareholders to accept equity in a more highly leveraged combined company; and
- Proposed a dual listing “that is unlikely to benefit Dorian shareholders.”
Nevertheless, Hadjipateras added that Dorian’s board was interested in discussing the acquisition or consolidation of some or all of BW LPG’s 17 eco-ships – vessels that promise reduced fuel consumption and various other energy-efficient features.
“We believe that such a proposal would allow for a more transparent relative valuation and could be concluded relatively expeditiously,” Hadjipateras wrote.
Dorian further announced that it had retained Evercore as financial adviser and Wachtell, Lipton, Rosen & Katz and Seward & Kissel LLP as legal advisers in connection with the proposal.