Höegh LNG Partners LP (NYSE: HMLP) announced that it has entered into a definitive merger agreement with Höegh LNG Holdings Ltd. (“Höegh LNG”) pursuant to which Höegh LNG will acquire, for cash, all of the outstanding publicly held common units of the Partnership, at a price of $9.25 per common unit for a total purchase price of approximately $167.6 million.
The revised price represents an increase of $5.00 when compared to the offer of $4.25 per common unit made by Höegh LNG on December 3, 2021, a premium of 35.0% to the closing price of the Partnership’s common units of $6.85 per unit on May 24, 2022 and a premium of 39.2% to the volume weighted average price of the Partnership’s common units for the 30-trading day period ended May 24, 2022.
In connection with the transaction, the Partnership’s incentive distribution rights will be cancelled. The Series A preferred units of the Partnership will remain outstanding.
In connection with the transaction, the board of directors of the Partnership directed the conflicts committee of the Board of Directors, comprised solely of directors unaffiliated with Höegh LNG, to consider Höegh LNG’s offer. Following a period of discussion with Höegh LNG and its advisors, the Conflicts Committee approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby are in the best interests of the Partnership and the holders of the Partnership’s common units unaffiliated with Höegh LNG. Based on the recommendation of the Conflicts Committee, the Board of Directors unanimously approved the merger agreement and recommended that the Partnership’s common unitholders approve the merger.
The merger is expected to close in the second half of 2022, and is subject to approval of the merger agreement and the transactions contemplated thereby by a majority of the outstanding common units of the Partnership and certain regulatory filings and customary closing conditions. Höegh LNG owns 45.7% of the common units and has entered into a support agreement with the Partnership committing to vote its common units in favor of the merger.
Credit Suisse International and Morgan Stanley & Co. LLC are acting as financial advisors to Höegh LNG and Kirkland & Ellis LLP is acting as its legal counsel with respect to the transaction. Evercore is acting as financial advisor to the Conflicts Committee and Richards, Layton & Finger, P.A. is acting as its legal counsel. Baker Botts L.L.P. is acting as the Partnership’s legal counsel.