BW has taken a 10.2% holding in the VLGC owner after snapping up shares owned by Scorpio Tankers, which had been Dorian’s largest investor, to restart consolidation talk in the booming market.
“BW is a serious company with deep knowledge of the shipping and gas business. We are flattered by the confidence that their investment shows in the sector and in our company,” Hadjipateras told TradeWinds today.
Dorian was the subject of takeover interest from Avance Gas last year and analysts say BW’s buy has revived the merger and acquisition story in the space.
“There has been a lot of talk about consolidation in the LPG market, but we believe this is the first step made to start this process,” Nicolay Dyvik, Oyvind Berle and Petter Haugen of DNB Markets said today.
They note BW LPG has 38 gas carriers and Dorian LPG has 23, meaning a combined fleet of 61 vessels.
“Investments from companies with a long-term point of view who know the ins and outs of the LPG market are always welcome,” Hadjipateras said, when asked whether the investment was welcome or if he was concerned BW was positioning for a takeover.
BW investment vehicle BW Euroholdings paid $92m for 10.2% of Dorian, with Oslo-listed BW LPG given an option on the stake.
“BW LPG has a strong balance sheet and could easily fund the $92m share purchase from its own sources, but this could reduce the dividend for six months,” DNB Markets said.
Hadjipateras explains while there is no direct business relationship between Dorian and BW, he has known Sir Y.K. Pao, Dr Helmut Sohmen and Sohmen-Pao for more than 40 years, a period that has included sale and purchase deals between the groups.
