FPSO owner BW Offshore has turned down an offer from parent BW Group to buy its shares in affiliate BW Energy.
Independent directors of the Oslo-listed company have followed the BW Energy board in rejecting December’s mandatory offer priced at NOK 27 per share, valuing the operation at NOK 6.7bn ($637m).
BW Offshore owns 22.52% shares in BW Energy.
The owner asked investment bank Arctic Securities to assess the deal.
“Based on careful assessment … and after having taken into consideration valuation advice received from Arctic Securities, BW Offshore’s strategy and such other factors as the company deemed relevant, BW Offshore has resolved not to accept the offer,” it said in a statement.
BW Group chairman Andreas Sohmen-Pao and Carl Arnet, chief executive of BW Energy, sit on the BW Offshore board.
They did not participate in the decision.
The offer from BW Group could see BW Energy, an oil exploration firm, delisted in Oslo.
BW Energy’s share price is currently NOK 26.80 in Oslo.
The company had sought a fairness opinion from Pareto Securities.
BW Energy said last month: “The board is of the view that the longer-term value potential of the company is greater than what is reflected in the offer price.”
But the directors, including DOF Group chief financial officer Hilde Dronen, also noted that the price represents a premium to the most recent trading levels.
Deadline approaching
The offer runs until 12 January.
BW Group said on 30 November that it had bought 250,000 shares in BW Energy for around NOK 5.9m, moving it to the 40% level that triggers a mandatory offer.
The parent already held a combined 63.3% before the offer, including BW Offshore’s stake, meaning share liquidity is already limited.
BW Group said the decision to trigger the offer was aimed at enabling BW Offshore to continue with its dividend policy of paying out BW Energy shares.
