(Adds case details, background, share move)
June 7 (Reuters) - Tanker firm DHT Holdings said a court in the Marshall Islands rejected Frontline Ltd's lawsuit against DHT selling a major stake to BW Group .
DHT last month rejected a fifth takeover proposal from shipping tycoon John Fredriksen's Frontline, calling the $500 million all-share bid "woefully inadequate".
DHT said on Wednesday that the court cited Frontline's "failure to demonstrate" a probability of success on the merits of its claims.
Frontline, which holds a 14.5 percent stake in DHT, has been trying for the past year to take over its New York-listed rival.
However, DHT struck a tankers-for-shares deal with BW Group in March, making the latter DHT's biggest shareholder with a stake of over 30 percent.
Frontline then sought to stop the BW deal proceeding in the U.S. courts but the New York County Supreme Court said on April 19 it had no jurisdiction over DHT, which is incorporated in the Marshall Islands in the Pacific.
DHT said its deal with BW Group was aimed at strengthening its market positions, not to block Frontline's proposal.
U.S.-listed shares of Frontline were down 1.2 percent at $5.60 and DHT was down 1.2 percent at $3.99 in midday trading. (Reporting by Ahmed Farhatha in Bengaluru; Editing by Maju Samuel)