Höegh family-owned firm and its new bank partner plan to delist company from the Oslo Exchange
LNG News Editor:
Höegh LNG, the Norwegian LNG fleet owner and floating terminal projects company with vessel contracts for China and India, is on the road to merging with a fund managed by US investment bank Morgan Stanley in the latest carrier shipping fleet to be targeted by Wall Street banking interests.
The Höegh family-owned firm Leif Höegh & Co. (LHC) has formed a joint venture with Morgan Stanley Infrastructure Partners to make a 23.5 Norwegian crowns ($2.73) offer per share to make Höegh LNG a private company.
The offer price carried a premium of around 36 percent on the closing price of the shares listed on the Oslo Stock Exchange.
Höegh LNG owns 12 LNG carriers and floating storage and regasification units on long-term contracts or currently part of tender offers for worldwide import projects.
Höegh LNG will hold a special meeting on March 30 in Bermuda when the deal will be voted on.
The company has called for shareholders to provide proxy votes and attendance slips by March 26.
The company will hold a bondholders meeting on March 22.
The offer is for around 50.4 percent of Höegh LNG’s shares, with the remainder already held by held by LHC.
“The offer price values the total share capital of the company at approximately 1.81 billion crowns ($212.2M),” said Höegh.
Höegh LNG rival GasLog Ltd, the Greek-based LNG shipping fleet owner with 35 vessels currently operating, has agreed a merger with a unit of US fund giant BlackRock.
GasLog said it had entered into an agreement and plan of merger with BlackRock’s Global Energy & Power Infrastructure (GEPIF), part of the New York-based firm focused on long-term infrastructure investments in the energy and power sectors.
The deal involves the acquisition of around 45 percent of GasLog Ltd’s outstanding common shares by BlackRock.
Analysts said that one major drawback from these LNG shipping-Wall St deals is a future lack of transparency through stock exchange regulation as the acquired companies will be delisted and their activities, previously open to public scrutiny with quarterly reports, will disappear behind closed doors.
Morgan Stanley aims in the full transaction to acquire all outstanding shares of Höegh LNG Holdings Ltd. by way of amalgamation.
Leif Höegh & Co is an industrial holding company owned by the Høegh family.
LHC and its predecessors were pioneers in the international shipping industry since 1927, taking delivery of their first LNG carrier in 1973 and their first floating storage and regasification unit (FSRU) in 2009.
“Now in the third generation of family leadership, LHC continues to focus on long-term value creation and innovation in the shipping sector,” said Höegh.
The transaction details mean that all Höegh LNG shares (other than those owned by LHC and its affiliates) will be cancelled for a consideration in cash of the 23.50 crowns per share.
The amalgamated Morgan Stanley-Höegh LNG would immediately delist from the Oslo exchange.
The bidders and Höegh LNG also declared the common and preference units of Höegh LNG Partners LP would remain outstanding and continue to trade on the New York Stock Exchange.
Höegh’s revenue also includes a contribution from the “Höegh Esperanza” with a contract to operate in the winter seasons in FSRU mode at the Tianjin port in northeast China.
Höegh LNG recently returned to profit in the fourth quarter as it prepared to deploy an FSRU as India’s latest, and seventh import terminal overall, in the West Coast port of Jaigarh in the state of Maharashtra.