Petronas fails to buy out LNG shipping unit

4/21/2013

Petronas fails to buy out LNG shipping unit

BY JASON NG

KUALA LUMPUR -- Petronas failed to buy out shipping unit MISC despite raising its offer by nearly 4% in a deal worth over $3 billion.

The offer for one of the world's largest operators of LNG in terms of fleet size didn't meet the required level of acceptance from shareholders, MISC said in a statement.

Petronas only managed to secure shares equivalent to 86.07% of MISC, just shy of the 90% required for the deal to go through. Petronas will now have to return the shares it received within 14 days. It didn't elaborate on its next course of action.

The company raised its offer to $1.81 a share from $1.74 after some of its largest minority shareholders viewed the original offer as low. An independent adviser appointed by MISC had said the revised offer was "not fair but reasonable" and recommended shareholders accept it.

Petronas had wanted to take full control of MISC to turn it around after recent losses. MISC is an important part of the Fortune 500 business, Petronas had said, but the prevailing industry backdrop and uncertain global economy made transforming it challenging.

Before the takeover offer, MISC's shares had nearly halved in value over the past two years as the company booked $789 million in losses from its liner business over several years. MISC ceased the container shipping business last year, saying the industry was plagued by overcapacity in a depressed freight rate environment.

Dow Jones Newswires

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