MAYBANK Securities has recommended that shareholders of offshore oil-and-gas contractor Dyna-Mac accept the revised S$0.67 a share offer from South Korean company Hanwha.
The revised offer comes after Hanwha on Sep 11 made a voluntary conditional cash offer to take management control of Dyna-Mac at S$0.60 per share.
Hanwha on Monday (Oct 14) said that the revised offer is final, and that it does not intend to revise the improved price but “reserves the right to do so in a competitive situation”.
In a Monday report, Maybank Securities analyst Jarick Seet said the S$0.67 a share offer price represents a fair exit price “for shareholders to realise their investment and reinvest into other undervalued counters”.
Noting that the offer price exceeds Maybank Securities’ S$0.64 target price, Seet said: “We think that the offer is fair and shareholders should accept the offer even though we are currently in a floating production storage and offloading upcycle.”
The revised offer price of S$0.67 a share exceeds the counter’s previous closing prices over the past 10 years.
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“Event-driven funds as well as institutional funds will likely take this chance to realise their gains and free up liquidity, as upside will be limited until Hanwha’s offer lapses,” Seet said.
Analysts had earlier recommended that Dyna-Mac shareholders think twice about accepting Hanwha’s offer in September to purchase their shares at S$0.60 a share.
Maybank Securities had advised shareholders to wait for a better deal as the offer price was fair but on the lower end of the fair-value range.
OCBC Investment Research had said that shareholders should reject the offer.
Hanwha said it has raised its offer price after considering Dyna-Mac’s value and growth prospects, financial performance, net cash position and order book, and the potential benefits of its recent Exterran Offshore acquisition.
The revised offer price represents a premium of 584.4 per cent over the company’s net asset value of S$0.0979 as at Jun 30.
The offer is a “final opportunity for shareholders to immediately realise attractive returns at compelling premiums” over the volume-weighted average price for the one-month, three-month, six-month and 12-month periods, respectively, up to and including Sep 10 when the counter was last traded, Hanwha added.
The closing date of the offer was extended to 5.30 pm on Nov 6.
