BW LPG has hiked its interest in VLGC rival Aurora, sending its shares soaring amid renewed takeover interest.
Oslo-listed BW LPG, already Aurora’s dominant shareholder, has added more than three million shares and also acquired around a third of its bond.
Shares in Aurora raced up by a quarter this morning as investors digested the development.
BW LPG has taken its shareholding to 29.83%, "which firms up BWLPG’s intention to acquire Aurora LPG", said analysts at Arctic Securities.
However, it is unlikely to trigger a full takeover - required when the company reaches a 33% holding - just yet.
Should it cross the threshold before the end of October BW LPG would have to pay NOK 40 per share, the highest price at which it has purchases stock in the past six months, Arctic’s Andreas Wikborg wrote in a report this morning.
BW LPG has bought 3,002,094 Aurora shares at what is believed to be a price of NOK 12 each. This takes its full holding to 8,852,841 shares.
At the same time it has invested NOK 57m to take a 33.53% interest in a bond set to mature next year, an intriguing move in light of how Aker engineered Solstad’s takeover of Rem Offshore this summer.
Analysts at Fearnely Securities say Aurora’s fleet fits BW like a glove.
“Given BW LPG’s strong financial position and liquidity, we see the potential full acquisition of Aurora LPG as a solid move, despite potentially reducing its relative contract coverage,” said Jonathan Staubo, Peder Nicolai Jarlsby and Espen Landmark Fjermestad.
Aurora stock was trading at NOK 12.65 each this morning, a 24.09% climb.
