Hoegh LNG Partners shareholders have approved its controversial merger with parent Hoegh LNG.
The New York-listed LNG shipowner said in a Securities and Exchange Commission filing on Tuesday that shareholders voted affirmatively on the $9.25 per share deal to take the company off public markets.
“The merger is expected to close on or about September 23, 2022,” Hoegh Partners said in the filing.
The merger was first announced in December, with Hoegh LNG offering $4.25 per share, a figure raised in May to the current $9.25 per share offer.
Despite the improvement, a prominent investor and analyst Ben Nolan of Stifel opposed the deal, arguing the improved offer undervalued the company.
Nolan had argued against the deal twice, in July writing that it “seemed questionable” as the initial offer was made following a charter dispute involving the charterer of the 170,000-cbm PGN FSRU Lampung (built 2014) and Hoegh LNG’s termination of a line of credit that pushed Hoegh LNG Partners to cut its dividend.
In a note published in August, Nolan encouraged shareholders to vote against the deal.
He said New Fortress Energy offered $12 per share which was at the midpoint of financial advisor Evercorew, who pegged the company's value as between $8.69 per share and $15.15 per share based on 2022 Ebitda projections.
The investor, Oceanic Investment Management, had asked both Hoegh LNG and Morgan Stanley to abandon the deal.
In two open letters sent earlier this month, chief investment officer Cato Brahde argued Hoegh LNG’s moves were “reminiscent of 19th [century] shipowners and does not behove a respectable 21st-century shipowning group”.
He argued the $9.25 per share offer was too low as floating storage and regasification units — of which Hoegh LNG Partners owns five — following Russia’s invasion of Ukraine and Europe’s turn toward other gas providers.
Brahde wrote that their conduct would jeopardize further business with both the Hoegh family and Morgan Stanley.
Hoegh LNG was a public company itself a public company until a March 2021 agreement with Morgan Stanley Infrastructure Partners made the company into a private, 50-50 joint venture in a $214m deal.
