Hanwha Group plans to acquire the entire stake not yet held by Singapore offshore shipyard Dyna-Mac for $450 million.
According to the latest news, the heirs to the estate of Dyna-Mac’s largest shareholder, the company’s founder, Desmond Lim Tze Jong, rejected Hanwha’s takeover offer, saying that Hanwha Group’s current offer for Dyna-Mac is not attractive and has not yet considered the latter’s growth potential. Dyna-Mac has a market valuation of S$670 million.
Up to now, Hanwha Group has a 25.4% stake in Dyna-Mac, of which 23.91% comes from Keppel. In May this year, Hanwha Group acquired a 23.91% stake in Dyna-Mac from Keppel for S$100 million, which is held by Hanwha Group’s subsidiaries Hanwha Marine (21.52%) and Hanwha Air (2.39%), respectively.
On September 11, Hanwha Group announced plans to acquire the remaining stake in Dyna-Mac at a purchase price of S$0.6 per share, a 21.2% premium to Dyna-Mac’s closing price on the day.
However, the heir to the estate of Desmond Lim Tze Jong’s estate claim that Hanwha Group’s offer does not “reflect the value and growth potential of Dyna-Mac” and that its offer was made at a time when the stock price was “at its lowest point in the last 35 trading days”, and that Dyna-Mac’s share price has been rising since then and has been above the purchase price.
Dyna-Mac’s share price reached a 52-week high of S$0.615 on 13 August and rose to S$0.64 on 7 Oct, surpassing the current purchase price, according to Dyna-Mac’s largest shareholder.
“Based on analysts’ consensus, earnings and dividend estimates for the end of the fiscal year 2024 and beyond are expected to increase with analysts’ 12-month share price targets ranging from S$0.64 to S$0.715,” the Estate claimed
“Whilst we note there are different considerations for every transaction, the lack of an attractive control premium in comparison with analysts’ 12-month price forecasts for Dyna-Mac makes the offer uncompelling,” a spokesperson for the Estate said.
The heir to the estate explained that Dyna-Mac is servicing “global Tier 1 customers from the industry” and that its “significant order book” stands at S$681m as of June 2024 with deliveries scheduled through the fiscal year 2026. With all that in mind, Lim Tze Jong’s Estate thinks that the offer should factor in the growth potential and performance of the company and its value to Hanwha.
As of June 2024, Dyna-Mac handheld orders reached S$681 million, with deliveries scheduled for FY2026. In light of this, Hanwha Group’s takeover offer should “take into account Dyna-Mac’s growth potential and performance and its value to the group.”
According to the official website, Dyna-Mac was founded in 1990 and listed on the main board of the Singapore Exchange.
The Company specializes in the engineering, procurement, construction, onshore pre-commissioning and commissioning of offshore modules and units such as floating production storage and offloading (FPSO), floating storage and offloading (FSO), floating liquefied natural gas storage and offloading units (FLNG) and floating storage and regasification units (FSRUs).
The company owns two offshore shipyards in Singapore and has established joint ventures and partnerships with shipyards in China, Malaysia and the Philippines.