Andreas Sohmen-Pao, chairman of BW’s board of directors, announced his company’s decision in a letter to John Hadjipateras, Dorian’s chairman, president and CEO. Sohmen-Po stated that it was “not normal practice nor in the best interest of our shareholders to hold a proposal open indefinitely, especially when it is highly favorable to the counterparty.”
His letter gave the impression that Dorian LPG was to blame for the failure of the unrequested takeover.
“It has been over four months since we proposed a combination of BW LPG and Dorian, and nearly three months since we improved our proposal,” Sohmen-Pao wrote. “To date, we have not had a formal response to our increased offer, and our meetings with you have not given any indication that you are willing to work towards a mutually beneficial outcome.”
BW made its acquisition offer in May, but Dorian rejected it in June. BW raised its per-share offer price for Dorian in July, but Dorian was rankled by BW’s public claims that it was ignoring its overtures.
“It is disingenuous for BW to characterize Dorian as nonresponsive and to completely mislead shareholders by failing to discuss the facts of the situation,” the Stamford company said in a statement issued last month. “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 chief Hadjipateras sent a letter to Sohmen-Pao in response, once again questioning BW’s view of evens.
“As you know, but failed to note in your letter, we extensively engaged with your team over the past few months,” Hadjipateras wrote. “In addition to our initial meeting and your presentation to our Board, two weeks ago we had a meeting that lasted multiple hours (with your and our advisors) where we extensively commented on your proposal and indicated the valuation parameters implied by a fair assessment of both companies.”
Hadjipateras further said that the BW offer, among other things, undervalued Dorian “on a relative Net Asset Value basis as your calculations overvalue your older, less fuel-efficient vessels and undervalue our young, fuel-efficient vessels.”
“To explore the full range of value-creating opportunities available to Dorian LPG,” Hadjipateras added, “we asked several times if you could improve your proposal, and left the door open to further discussion and a response to the issues that we outlined in our latest meeting. Instead, you have refused to consider improving your proposal and, most recently, have withdrawn your proposal.”