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The largest shareholder of Singapore-based Dyna-Mac, the Estate of its founder Desmond Lim Tze Jong, has stated that the current offer for the company by South Korean conglomerate Hanwha was not compelling and did not factor in the growth potential of the company.
Hanwha Group made an offer to acquire all shares it currently does not own in Dyna-Mac via a tender offer. Hanwha already owns a 25.36% stake in Dyna-Mac most of which it acquired by buying Keppel’s 23.91% stake back in May. The offer is for S$0.60 ($0.46) per share. At the time, this was a 21.2% premium over Dyna-Mac’s last closing price.
However, Lim Tze Jong’s estate claims that the offer of S$0.60 per share by Hanwha does not “reflect the value and growth potential of Dyna-Mac” and that it was made when the share price “was at its lowest point over the previous 35 trading days.”
Hanwha’s offer was announced on September 11 and the share price has since, according to the Estate, increased and has been consistently trading above the offer price. It stated that Dyna-Mac’s share price hit a 52-week high of S$0.615 on August 13 and another high of S$0.64 on October 7, beyond the current offer price.
“Based on analysts’ consensus, earnings and dividend estimates for the end of the fiscal year 2024 and beyond are expected to increase with analysts’ 12-month share price targets ranging from S$0.64 to S$0.715,” the Estate claimed
“Whilst we note there are different considerations for every transaction, the lack of an attractive control premium in comparison with analysts’ 12-month price forecasts for Dyna-Mac makes the offer uncompelling,” a spokesperson for the Estate said.
The Estate explained that Dyna-Mac is servicing “global Tier 1 customers from the industry” and that its “significant order book” stands at S$681m as of June 2024 with deliveries scheduled through the fiscal year 2026. With all that in mind, Lim Tze Jong’s Estate thinks that the offer should factor in the growth potential and performance of the company and its value to Hanwha.
“Securing control of Dyna-Mac could enable Hanwha to realise synergies that can be created, including economies of scale, improving productivity and cost efficiency, as well as strengthening engineering competencies,” added the spokesperson for the Estate. |
