BT Mark to Market: The big takeover - Hanwha’s high-stakes move on Dyna-Mac Holdings

IN THIS episode of Mark the Market podcast, Ben Paul, senior correspondent, at The Business Times delves into the recent corporate buzz surrounding Dyna-Mac Holdings. Providing a thorough analysis of the ongoing acquisition offer from a special purpose vehicle controlled by South Korea’s Hanwha Ocean and Hanwha Aerospace.

An introduction of Dyna-Mac

Ben outlines the significant business revival of Dyna-Mac - an offshore and marine engineering company. In the first half of 2024, Dyna-Mac reported a 42.5 per cent revenue increase, attributed to major project completions and enhanced productivity. With a robust order book and promising long-term growth in the global FPSO market, Dyna-Mac‘s improved financial position has set a bullish tone for its shares, which significantly rose by nearly 48 per cent before the acquisition offer.

Find out more about Hanwha’s acquisition offer and why the offer was raised. Despite the share trading slightly below this revised offer price, the offeror still finds the final price competitive and potentially effective for concluding the deal. Ben emphasises the notable aspects of the offer, such as Hanwha’s intention not to delist Dyna-Mac immediately - though leaving room for a potential delisting if circumstances transpire. 

Looking at the valuation

This uncertainty introduces a unique dynamic to the acquisition, especially given its treatment by the Independent Financial Advisor (IFA), Zico Capital. Critical to the discussion is Zico Capital’s evaluation, which compared Hanwha’s voluntary general offer to precedent non-privatisation transactions, involving deals where major shareholders made general offers for technical reasons, often at lower prices. 

Ben questions this method, and further underscores Dyna-Mac’s superior financial performance metrics, such as a high return on equity, which justify a higher price to NAV ratio compared to its peers. 

Due diligence and greater clarity

While acknowledging the cyclical nature of the industry and the speculative long-term profitability, Ben advises investors to critically evaluate IFA reports, pushing for detailed justification of their recommendations. The podcast concludes with a note on the potential increase in similar voluntary general offers in Singapore, hinting at a future filled with strategic acquisitions driven by promising growth prospects rather than just undervaluation. 

Listen to the podcast now for Ben Paul’s full analysis.

Mark to Market will continue to explore and report on key market trends and corporate developments, with future episodes poised to offer more insightful analysis and expert opinions. 

For any thoughts or questions, reach out to the podcast team at btpodcasts@sph.com.sg. Follow BT Correspondents for the latest updates and episodes.

Written and hosted by: Ben Paul (benpaul@sph.com.sg)

Edited by: Howie Lim & Claressa Monteiro

Produced by: Ben Paul & Howie Lim

Engineered by: Chai Pei Chieh

A podcast by BT Podcasts, The Business Times, SPH Media

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