Dorian LPG says it has met multiple times with BW leadership

Takeover target says it is continuing to evaluate merger proposal and does not close doors to potential opportunities.

Dorian LPG has broken its silence on a second takeover offer from BW LPG as an engrossing merger and acquisition story delivered a fresh chapter today.

The takeover battle has been developing since the initial offer in May, with New York-listed Dorian rejecting BW LPG’s first approach in June, before looking to flip the script by suggesting it buy its suitor’s eco VLGCs.

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BW LPG came back with a higher bid in July with Dorian issuing a statement simply stating it would evaluate the proposal with its advisors.

Its only other comment on the possible $1bn plus deal came on the company’s quarterly conference call in mid-August when chief executive John Hadjipateras said Dorian was continuing to evaluate BW’s proposal along with other opportunities to create value. However, questions from analysts on the topic were not part of the call.

While Dorian has not commented since, founding shareholder Seacor has voiced support for the transaction and BW LPG chief executive Martin Ackermann has reiterated his company’s interest.

In an interview with TradeWinds in late August, Ackermann said eight weeks after the increased offer was made his company had yet to receive a response. On Friday Dorian shareholder Oppenheimer + Price called for the company to negotiate.

Two teams met

Now Dorian LPG has gone public with the first public pronouncement that the two sides met multiple times.

“We welcome input and feedback from all of our shareholders. The board and management team are singularly focused on maximizing value for Dorian shareholders," Dorian said in a statement to the New York Stock Exchange.

“It is in this spirit that Dorian has met multiple times with BW’s leadership team, including an in-person meeting with the entire Dorian board and BW.”

Dorian says it also requested information on BW’s net asset value since July, which was provided a “few days ago” and further meetings are now being planned.

“The Dorian board and management team continue to explore whether BW can deliver appropriate value to Dorian shareholders as we evaluate the opportunities before us,” Dorian said.

“We will not close doors to potential opportunities, and will respond to BW’s proposal in due course.”

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Dorian has yet to comment on when the meetings took place and did not disclose the nature of the conversations in the statement. Attempts to reach Ackermann for comment were unsuccessful at the time of writing.

Long-standing investment

BW LPG’s parent company first invested in Dorian back in 2015 in a deal that immediately sparked merger and acquisition speculation.

BW topped up that stake in January after Dorian dropped a shareholder rights plan and submitted a $1.1bn share for share merger offer in May, which was rejected the following month.

While Dorian countered with a suggestion it could negotiate to buy BW LPG’s eco VLGCs, it received a higher offer in July.

Time-line of VLGC takeover saga

July 2015: BW Group emerges as a significant shareholder in Dorian LPG, buying $92m worth of stock from Scorpio Tankers. While Hadjipateras said BW’s interest was flattering, analysts were already speculating a first step in a consolidation story had been taken.

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December 2016: Dorian introduces a shareholder rights plan, commonly-known as a poison pill, just a short time after BW LPG secures the takeover of Norwegian VLGC shipowner Aurora LPG.

January 2018: HNA Group exits its shareholding in Dorian LPG, equal to around 12%. Just days after Dorian drops the poison-pill, BW increases its stake.

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May 2018: Dorian receives a $1.1bn share for share offer from BW that would combine the two largest players in the VLGC space. BW LPG chief executive Martin Ackermann says will be a "bellwether".

June 2018: Dorian investors Robotti & Co, Oppenheimer + Close and Metropolitan Capital Advisor voice their thoughts on the proposal.

June 2018: Dorian rejects what it calls BW’s “unsolicited, conditional proposal." A few days later Hadjipateras dismisses the suggestion Dorian directors had been unwilling to engage with its suitor and raises his own desire to buy BW LPG’s eco VLGCs.

July 2018: Charles Fabrikant's Seacor, a founding Dorian shareholder, voiced its support for combining the two firms.

July 2018: BW LPG announces it is nominating three directors to the board of Dorian LPG.

August 2018: Ackermann says BW LPG remains “absolutely motivated” to pursue a merger with Dorian LPG as it looks to create an “LPG powerhouse”. He says eight weeks on from the second proposal his company has yet to receive a response from Dorian.

September 2018: Dorian issues a statement saying it has met with BW representatives multiple times and is continuing to evaluate the bid.