Estate of Dyna-Mac’s founding shareholder says voluntary conditional cash offer not compelling

DYNA-MAC’S single-largest shareholder, the estate of founder Desmond Lim, said the voluntary conditional offer of S$0.60 a share by South Korean company Hanwha is not compelling.

On Monday (Sep 23), the estate said the offer does not “adequately reflect the value and growth potential” of Dyna-Mac, which it says has become a “global multi-disciplinary” contractor.

It highlighted that the company reported record financials in its latest first-half results, with net profit surging 283.9 per cent on the year to S$38.8 million – buoyed by higher productivity, revenue and projects completion.

“This strong financial performance is supported by strong fundamentals which the group has built over the years,” said the estate.

It added that Dyna-Mac’s share price hit a 52-week high of S$0.615 on Aug 13, and another peak of S$0.635 on Sep 16 – both of which are higher than the offer price, thus “demonstrating the confidence of investors” in the company’s growth potential.

Additionally, the estate of the founding shareholder also believes that Dyna-Mac is “very well-positioned” for strong growth. It expects Dyna-Mac’s orderbook to grow, given the addition of its new yard facilities.

Citing Market Research Future, it said the floating production storage and offloading (FPSO) market is expected to grow at a compound annual growth rate of 12.5 per cent through to 2032.

Lastly, the estate noted that the current offer price is not aligned with the aspirations of Lim, who passed away in 2019.

It noted that Lim had over the years “diligently” developed the company into a global contractor, from its initial business in the construction of piping systems and steel structures.

“Dyna-Mac, with its high net cash position, potential dividends and higher potential profitability in the next few years, coupled with the robust outlook for FPSO, is definitely worth more than S$0.60 a share.

“The estate is not opposed to proposed offers for Dyna-Mac, but like all shareholders, it strongly believes that any offer must be compelling and reflect the true value of Dyna-Mac,” it added.

To recap, Hanwha earlier this month launched a voluntary conditional cash offer through a special-purpose company to take management control of the offshore oil-and-gas contractor.

The offeror is Hanwha Ocean SG Holdings, which was incorporated by Hanwha Aerospace and Hanwha Ocean for the purpose of the offer.

Hanwha said that it does not currently have any intention to actively pursue the delisting of Dyna-Mac from the Singapore Exchange’s mainboard.

Shares of Dyna-Mac were trading flat at S$0.63 as at 3.05 pm on Monday.