AsianOil: Hanwha raises offer for Singapore's Dyna-Mac

South Korean group Hanwha Group raised its offer on October 14 for remaining shares in Singapore’s Dyna-Mac, revaluing the offshore oil and gas structure builder at SGD791mn ($605mn). 

The move comes days after Hanwha said it would maintain its original offer, which valued Dyna-Mac at SGD669mn. This was despite the estate of Dyna-Mac founder Desmond Lim Tze Jong, the contractor’s largest non-Hanwha shareholder, stating in late September it did not find Hanhwa’s offer compelling, arguing it did not reflect the company’s value nor its growth potential.

The increased offer is SGD0.67 per share, representing a 35.4% premium to Dyna-Mac’s last traded price on September 10, prior to the earlier offer being announced. 

Hanwha stressed that the new offer is “final” and it “has no intention to increase or revise” it.

Lim’s estate has a 28.4% interest in Dyna-Mac, while Hanwha’s Singapore-based subsidiaries Hanhwa Aerospace and Hanwha Ocean already control a combined share of 24%.

The latest offer reflects intrinsic value, Hanwha said, and the company “may consider other strategic options available to it should the offer not succeed at this juncture.”

Founded in 1990, Dyna-Mac focuses on marine floating offshore plant structures and runs two manufacturing shipyards in Singapore, and has joint ventures and other partnerships with shipyards in China, Malaysia and the Philippines. Its main product is floating production storage and offloading (FPSO) vessels, demand for which is rising as oil and gas operators boost investment in supply in the wake of the energy crisis. According to Hanhwa, 83 of the vessels are set to be ordered by 2030.

The company also develops floating LNG (FLNG) facilities and floating storage and regasification units (FSRUs), which have also seen a surge in demand as a result of rising global investment in natural gas supply.

Hanwha’s pitch to Dyna-Mac shareholders is that through its takeover, the contractor can develop new technologies and investments in Singapore’s energy sector while remaining a Singaporean business. It argues that the company will need to bulk up to a global level to maintain its growth trajectory.

Originally Hanwha said it hoped to conclude the acquisition by the end of this year.

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