Seacor Holdings, one of the founders and a major shareholder of Dorian LPG, has thrown its weight behind an acquisition offer from Andreas Sohmen-Pao’s BW LPG.
In an open letter to the Dorian bBoard, Seacor’s Charles Fabrikant said that future consolidation was one of the drivers behind investing in the gas sector initially, and asked the Dorian board to think more expansively, saying a combined entity would be a more relevant and valuable platform.
BW submitted an increased offer for Dorian last week after much back and forth between the two companies since BW submitted its original bid in May. Dorian’s John Hadjipateras rejected the bid saying it failed to recognise the value of its younger ships and superior commercial performance, while forcing shareholders to accept equity in a more highly-leveraged, combined company. Dorian has yet to respond to the revised offer.
“The Dorian board and BW have been engaged in a debate about NAV. In the absence of fluid market activity NAV becomes notional asset value. Even if NAV were clearly discernible, the pertinent issue for Dorian shareholders is whether a combination would result in sufficiently better potential value realization. A thoughtful approach entails more than simply placing a theoretical value of each company’s ships,” Fabrikant said.
Dorian stated that it had been receiving advice from shareholders not to accept the deal, an action which Fabrikant said made him feel appropriate to speak up.
Seacor holds just under 10% in Dorian, and many Seacor shareholders continue to own shares in Dorian after it distributed the shares to its shareholders last year.