In the ongoing back and forth between top management at acquisitive BW LPG and its target Dorian LPG, John Hadjipateras has reiterated the $1.1bn bid for his company undervalues it.
BW LPG had this week sent a letter to Dorian’s board urging them to engage further in discussions on the takeover, suggesting that a significant shareholder base were keen for the Andreas Sohmen-Pao-led vehicle to proceed with the buyout. Hadjipateras, the founder of Dorian, has since dismissed many of BW LPG’s claims in a release issued from Dorian’s Stamford headquarters.
Hadjipateras stated less than 5% of shareholders to date were in favour of the merger.
“In contrast,” Hadjipateras wrote, “our board, whose members are beneficial owners of more than 25% of our outstanding shares, has unanimously concluded that BW LPG’s proposal undervalues Dorian and is not in the best interests of Dorian and its shareholders. To cite a few key financial metrics, the proposed transaction would be dilutive to Dorian’s shareholders’ earnings in 2018, would create a more leveraged enterprise from Dorian’s perspective and fails to recognize that Dorian’s equity contribution to the combined enterprise would exceed 50% of the total, based on 2018 relative EBITDA and existing debt levels.”
Also contrary to BW LPG’s assertion, Hadjipateras stated he and his board had not declined to engage with BW LPG. In fact, he said Dorian has offered to meet with BW LPG to discuss an acquisition of BW LPG’s “ECO-ships”, to no avail.
In a final flourish to an increasingly heated takeover battle, Hadjipateras concluded: “BW LPG’s wish to have Dorian’s shareholders subsidize its fleet renewal is not a reason compelling enough to divert us from our strategy to serve our own shareholders.”
Dorian also announced yesterday that it had completed three financing agreements resulting in aggregate proceeds of $65.1m. The proceeds from the financings were used to repay all remaining outstanding amounts due under a bridge loan facility with DNB Capital.