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Maritime Logistics Professional

June 17, 2018

Dorian LPG Rejects BW LPG Merger Offer

Photo: Dorian LPG

Photo: Dorian LPG

 Dorian LPG announced that its Board of Directors has unanimously declined an unsolicited, conditional proposal from Norway's BW LPG, the world's largest liquid petroleum gas shipper, to combine with Dorian in a stock-for-stock transaction.  

After a thorough review, conducted in consultation with its financial and legal advisors, the Board of Directors unanimously concluded that the proposal is not in the best interests of Dorian and its shareholders., said a press release from the company.
Last month, BW LPG offered to buy competitor Dorian LPG in a $1.1 billion all-stock deal in an effort to boost its earnings in a weak market.
The statement said that BW LPG's indication of interest fails to recognize the value of Dorian's 19 ECO-ships, comprising 86% of Dorian's fleet of 22 ships.  By contrast, only about 40% of BW LPG's 51-ship fleet consists of ECO-ships, and BW LPG's owned and operated fleet is considerably older than Dorian's. 
The Board noted that BW LPG's proposal undervalues Dorian on both an absolute- and relative-value basis; Fails to recognize the value of Dorian's younger, more fuel-efficient ships; Fails to recognize Dorian's superior commercial performance; Forces shareholders to accept equity in a more highly-leveraged combined company; and Proposes a dual listing that is unlikely to benefit Dorian shareholders.
The Board believes that Dorian's current strategy is working and that Dorian's younger, more fuel-efficient fleet with lower leverage protects the Company at the bottom of the industry cycle and positions it best for long-term growth and success.
Dorian has retained Evercore as financial advisor and Wachtell, Lipton, Rosen & Katz and Seward & Kissel LLP as legal advisors, in connection with the proposal.
Dorian LPGNorwaySeward & Kissel LLP