The share price of Avance Gas dipped on Tuesday after John Fredriksen priced his offer to buy the rest of the VLGC owner.
The shipping tycoon's private Hemen Holding will pay NOK 43 per share or NOK 2.22bn ($255m) for the remaining 67% of the company that Hemen and affiliate Frontline does not own.
The price closely mirrors the closing price on Friday, causing the stock to drop 2.5% to NOK 42.35 on Tuesday morning in Oslo. The stock closed down 0.64% at NOK 43.14 at the end of Tuesday, however.
The offer will run to 12 October, with DNB Markets appointed as the receiving agent.
Hemen holds 25.4m shares, equalling 32.78% of the shipowner, while Fredriksen tanker company Frontline has another 442,000 shares, bringing the combined ownership to 33.35%.
Fearnley Securities, which has a buy rating on the stock, said the offer price represents about 70% of the estimated net asset value (NAV) of Avance Gas.
But the level is a 30%-plus premium to where rival BW LPG is trading at slightly north of 50% of NAV.
More enticing?
"With its closest peer selling off in recent weeks, it likely makes the offer more enticing than what would have been the case a month ago," analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart said.
Hemen triggered the mandatory offer by increasing its stake in Avance Gas in August.
The highest price that Hemen has paid for Avance stock over the past six months was also NOK 43.
"We believe there could be potential for more," analysts at DNB had said last month.
"Taking the company private could realign value with the physical market, as stock markets have historically priced deep discounts into the LPG stocks."
Hemen is a Cyprus-based company indirectly controlled by trusts established by Fredriksen for the benefit of his immediate family.
Avance Gas controls a modern fleet of 13 VLGCs.
The shipowner also has an orderbook of six dual-fuel newbuildings scheduled for delivery between the end of 2021 and 2023.
Taking full control of the outfit would mark the culmination of Fredriksen's moves to tighten his grip on the shipowner and fight off potential suitors.
In March, Petredec revealed a stake of 10% in Avance Gas and has since added to that total.
Petredec is the second-biggest shareholder on record, but Singapore's BW LPG has 0.66% and Dorian LPG 1.9%.
Fredriksen rejected any idea of a merger with BW LPG earlier this year.
Avance recorded net profit of $1.47m in the second quarter, down from $6.71m for the same period of last year.
