Hanwha launches voluntary conditional cash offer for Dyna-Mac at S$0.60 a share
South Korean company Hanwha has launched a voluntary conditional cash offer through a special-purpose company to take management control of offshore oil-and-gas contractor Dyna-Mac : NO4 at S$0.60 a share.
The offeror is Hanwha Ocean SG Holdings, which was incorporated by Hanwha Aerospace and Hanwha Ocean for the purpose of the offer.
Hanwha Ocean is a shipbuilding company, and Hanwha Aerospace is in the defence, aerospace and space business. Both companies are listed on the Korean Stock Exchange.
As of Sep 11, Hanwha Aerospace and Hanwha Ocean collectively owned 282.9 million, or 25.36%, of the total number of issued shares.
The acquisition of Dyna-Mac will enable Hanwha Ocean to generate "potential synergies" with Dyna-Mac, including economies of scale, improvements in productivity and cost efficiency, as well as the strengthening of domain knowledge such as engineering competencies and best practices.
Hanwha intends to make a voluntary conditional cash offer for all the issued and paid-up ordinary shares in the capital of Dyna-Mac, other than those it already owns or has agreed to acquire.
It will not make an offer to acquire warrants from warrant holders. Nevertheless, the offer will be extended to all new shares issued pursuant to the exercise of the warrants prior to the close of the offer.
Accordingly, warrant holders can accept the offer by exercising their warrants into shares and tendering such shares in acceptance of the offer.
Hanwha said that it does not have any intention presently to actively pursue the delisting of Dyna-Mac from the mainboard.
However, if the free-float requirement is not satisfied at the close of the offer and trading is suspended, Hanwha said it does not intend to undertake or support any action to lift the trading suspension.
Hanwha, the offeror, plans to exercise its right to compulsorily acquire all the offer shares not acquired under the offer if it receives valid acceptances in respect of not less than 90% of the total number of issued shares.
In such an event, it intends to exercise its right to compulsorily acquire all the offer shares not acquired under the offer and proceed to delist the company from the Singapore Exchange.
The offer will be conditional upon a minimum acceptance condition of more than half the shares in Dyna-Mac, including all shares owned by the offeror and its concert parties, and a favourable antitrust decision from the Competition and Consumer Commission of Singapore.
If the offer lapses due to an unfavourable antitrust decision, but the decision later becomes favourable, a new offer period will automatically start a day after the favourable decision is issued by the commission.
Hanwha Aerospace and Hanwha Ocean will fund the offer through a shareholders' cash loan to be provided by them in the shareholding proportion of the offeror, as well as a swap arrangement between both parties.
The offer process is expected to be completed by the end of this year.
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bullrider_21 OP : Maybank Securities analyst Jarick Seet sees that the offer is "fair" but may be "slightly on the lower end".
"Our last target price was 64 cents," Seet points out. "There is also a good chance that they might raise the offer to cross 50% and have [a] controlling stake as they have stated this is not the final offer."