FSRU player Hoegh LNG has more than doubled its offer to buy all publicly held common units of New York-listed Hoegh LNG Partners and expects to close the merger deal in the second half of this year.
Back in December, Hoegh LNG said it had submitted a non-binding proposal to HMLP’s board to buy all publicly held common units of the partnership in exchange for $4.25 in cash per common unit.
The firm said in a statement on Wednesday it has entered into an agreement and plan of merger with HMLP but the deal comes with a much higher price tag.
Hoegh LNG said it would acquire by merger all of the outstanding common units representing limited partner interests of the partnership not already owned by Hoegh LNG in exchange for $9.25 in cash per common unit.
This puts the total purchase price to about $167.6 million. Hoegh LNG currently owns 45.7 percent of the the partnership’s common units.
The merger consideration represents an increase of $5.32 or 135.4 percent per common unit when compared to the closing price per common unit of $3.93 on December 2, 2021, immediately prior to Hoegh LNG’s initial offer.
Also, the new offer is a premium of $2.40 or 35 percent to the $6.85 closing price per common unit on May 24, 2022 and a premium of 39.2 percent to the volume weighted average price of the partnership’s common units for the 30-trading day period ended May 24, Hoegh LNG said.
Hoegh LNG said the transaction remains subject to approval of the merger agreement and certain regulatory filings and customary closing conditions.
HMLP operates five FSRUs, namely Hoegh Grace, Hoegh Gallant, Cape Ann, Neptune, and PGN FSRU Lampung.
To remind, HMLP said in August last year it had filed a countersuit against Indonesian state-owned gas firm PT Perusahaan Gas Negara (PGN), a unit of Pertamina, over issues related to the Lampung FSRU charter.
The vessel serves a 20-year charter deal with PGN LNG, a unit of PGN, off the southeast coast of Sumatra in Indonesia. Hoegh LNG manages the FSRU while the limited partnership owns it.
Hoegh LNG said in its first-quarter report that HMLP’s main focus remains the dispute with the charterer of PGN FSRU Lampung but “no assurance can be given at this time as to the outcome of the dispute.”
Earlier this month, the FSRU located off the southeast coast of Sumatra in Indonesia had completed its 39th ship-to-ship LNG transfer since 2014.