Petronas Makes $2.8B Buyout Offer to LNG Shipper MISC

State-backed Petronas has made a $2.8 billion (MYR8.8 billion) offer to buy out other shareholders in liquefied natural gas (LNG) shipping unit MISC and delist it, both companies confirmed in disclosures released late Thursday.

Petronas, which owns 62.7 percent of MISC, made an offer for the remaining shares at $1.71 (MYR5.30), according to a statement posted by MISC. This works out to a 19 percent premium to MISC's closing price of $1.43 (MYR1.13)

Commenting on its decision to acquire MISC, Petronas said in a statement: "The prevailing industry backdrop and uncertain global economy have made efforts to sustain and transform the business of MISC challenging. The offer represents a significant step by Petronas to take MISC private and obtain full control of the company which will provide Petronas with greater flexibility in deciding MISC’s strategic direction."

Petronas reaffirmed MISC that it has no plans to dismiss or make redundant the employees of MISC as a direct result of the offer.
MISC in the shipping arm of Petronas; the former is involved in LNG transportation and operations and has in its fleet two LNG vessels which are converted into floating storage units (FSUs).

With MISC's capabilities in LNG transportation, the business appears to be a good fit for Petronas, given the oil giant’s long-term focus on developing its LNG operations.

Malaysia's Prime Minister Najib Razak said in a public address in September last year that he aims to establish the country as Asia's LNG trading hub by 2020 with the establishment of a $1.3 billion LNG terminal in the Pengerang Integrated Petroleum Complex. In late November last year, Petronas confirmed a massive discovery of two major gas reserves, totaling over 4 trillion cubic feet, offshore Sarawak.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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