Dyna-Mac’s offeror aims to provide scale, potential synergies through acquisition
HANWHA Ocean SG, the offeror with a voluntary conditional cash bid to take management control of Dyna-Mac, said it could provide scale and potential synergies needed by the offshore oil and gas contractor.
In its offer document filed on Wednesday (Oct 2), the special purpose vehicle owned by South Korean public companies Hanwha Aerospace and Hanwha Ocean pointed out that Dyna-Mac now requires global scale to level up as well as defend its competitive position.
Hanwha Ocean is a shipbuilding company, and Hanwha Aerospace is in the defence, aerospace and space business. Both companies are listed on the Korea Stock Exchange.
Dyna-Mac lacks economies of scale and technology, making navigating the global energy transition more challenging for it, Hanwha Ocean SG said in the offer document.
Dyna-Mac also faces low barriers to entry in the upstream market for the fabrication of offshore topside modules, the offeror added.
“Given there are no factors such as technology, research and development requirements, regulatory barriers, import restrictions and intellectual property rights that would constitute an effective and defensible barrier to entry, the Company will continue to face significant pressure from potential and existing competitors,” Hanwha Ocean SG said.
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Hanwha Ocean SG said its offer to take over control of Dyna-Mac will enable the latter to introduce new technologies and investments in the Singapore energy market while preserving its status as a Singaporean home-grown enterprise.
Hanwha Aerospace and Hanwha Ocean collectively owned about 282.9 million, or 24.31 per cent, of the total number of issued shares as at Sep 27. According to the offeror, it and the concert parties collectively have the second largest shareholdings in Dyna-Mac.
Hanwha Ocean SG made the offer in September at S$0.60 a share, and the offer closes at 5:30 pm on Oct 30. However, some analysts and the estate of Dyna-Mac’s founder have said that the offer is not compelling.
Dyna-Mac shares closed unchanged at S$0.63 on Wednesday, before the offer document was filed.
