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Dockwise Sends Unsolicited Low-Ball Offer to Fairstar Heavy Transport

Rob Almeida
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April 23, 2012

Fairstar Heavy Transport N.V. (FAIR) announced today that they have received an unsolicited, conditional, offer from Dockwise to acquire Fairstar shares at a purchase price of NOK 9.3 per share.

The Joint Supervisory and Management Boards of Fairstar have met this evening and concluded that the conditional offer for Fairstar shares significantly undervalues the business and recommends to Fairstar shareholders NOT TO ACCEPT the conditional offer from Dockwise. The Board is aware that a number of shareholders have been solicited by Dockwise to enter into a conditional agreement at the current offer price and cautions shareholders to consider that accepting such an arrangement may limit their opportunities to accept an alternative proposal at a higher offer.

In their press release this morning, Dockwise’s Chief Executive Officer, André Goedée, said:

“The proposed acquisition of Fairstar, and the integration of their four vessels into our fleet significantly accelerates progress towards our strategic objectives. Fairstar’s growing position in downstream processing projects, including LNG module transportation developments such as Gorgon and Ichthys, is highly complementary to Dockwise’s existing market strengths. The transaction powerfully enhances our ability to provide our clients throughout the Oil & Gas industry with the diverse and project specific services they require. Next and of equal importance is the fundamental increase in size of Dockwise, reinforcement of its balance sheet and increased earnings potential. An important step forward at the right time.”

Fairstar considers the Dockwise offer to be opportunistic and overlooks a number of significant aspects of Fairstar’s business, notably the replacement cost of the Fairstar fleet, the value of Fairstar’s order book and the reputation Fairstar has established as a provider of high value marine transportation services for energy infrastructure projects involving the world’s major energy and EPC Companies.

Philip Adkins, Chief Executive Officer of Fairstar, stated on behalf of Fairstar,

Fairstar has demonstrated remarkable success building an order book of almost USD $300 million with a modern, four vessel fleet. We have been awarded a series of high value, multi voyage contracts for energy infrastructure projects for on-shore LNG, as well as off-shore field developments. In every single contract award, we have competed against Dockwise and won. The Fairstar “Red Box Strategy” has built the foundation of a business that has clear, sustainable returns to Shareholders for the next five years. The Dockwise offer is a clear confirmation of their failure to compete at the high value segment of the market. It is no surprise that they would try to capture the benefits of high value, multi voyage contracts by trying to buy our company. However, the conditional nature of their proposal as well as the significant discount to the true value of Fairstar that they are offering should be treated with suspicion by shareholders. Consolidation in the marine heavy transport industry is not limited to the potential combinations the market is now aware of. After the Dockwise offer was published on the evening of April 22, Fairstar has been contacted by a number of shareholders who have informed us that they will not accept the conditional offer and have encouraged management to explore alternatives that will realize a more appropriate level of value for the company.

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