HW can only keep buying and wait for shareholders to tender and hope that gains mgmt control.
But it looks like they wont buy everyday, maybe wait till there is significant 0.665 shares on offer before gulping down.
Dyna-Mac chief AC Lim stays cool amid takeover offer tussle, remains focused on steady growth
Although he maintains that he is risk-averse, the CEO is already gunning for inorganic expansion should the Hanwha deal fall through
DYNA-MAC chief executive officer Lim Ah Cheng &ndash better known in the industry as AC Lim &ndash deserves every accolade.
After taking the helm in 2020, he managed to bring the beleaguered offshore oil and gas contractor back from the brink of bankruptcy.
So much so that Dyna-Mac is now the subject of a voluntary conditional cash offer from South Korea&rsquo s Hanwha, which wants to take management control at S$0.60 per share.
For Lim, further validation of the turnaround story came from an unlikely source &ndash one of the company&rsquo s main competitors in modular construction for the oil and gas industry.
&ldquo He called me up for lunch and told me: &lsquo Look, a few years ago, we thought we would beat you flat. But after four years, you&rsquo re now probably better than me in terms of FPSO (floating production storage and offloading) modules&rsquo ,&rdquo Lim recounted.
The secret to his success in turning Dyna-Mac around could well be his single-minded approach to growing the business.
Under his leadership, Dyna-Mac grew its order book to S$681.3 million as at June 2024, with deliveries scheduled until the end of FY2026.
Meanwhile, the group&rsquo s net cash position stood at S$307.7 million, with zero bank borrowings.
For the first half of FY2024 ended June, Dyna-Mac&rsquo s earnings more than trebled to S$38.8 million, from S$10.1 million in the corresponding period the year before, as revenue climbed 42.5 per cent to S$259.7 million.
The group attributed the bottom line improvements in H1 to the completion of major projects, improved productivity, and an increase in the volume of projects undertaken.
When viewed across a longer time horizon, Dyna-Mac&rsquo s growth is even more impressive.
For H1 FY2020 &ndash just months after Lim became CEO &ndash the group registered a net loss of S$14.2 million, on revenue of S$51.4 million.
&ldquo When I first joined, we just wanted to survive,&rdquo Lim said. &ldquo I didn&rsquo t want to mess it up and have the company fail under my charge.&rdquo
A year later, in FY2021, Dyna-Mac started to turn a profit.
&ldquo One important thing is to have a business model that is very robust. If we can achieve what I set out to do, I think we will be pretty strong,&rdquo Lim explained.
&ldquo I want to have a company that can go through any crisis, which means you must have the order book and the cash.&rdquo
Attractive target
Dyna-Mac&rsquo s turnaround, however, has made it an attractive target for mergers and acquisitions (M& A).
&ldquo We are very diligent and super-prudent in spending. But that creates another issue: you make yourself too attractive,&rdquo Lim noted.
On Sep 11, South Korean conglomerate Hanwha launched a voluntary conditional cash offer through a special-purpose company to take management control of Dyna-Mac at S$0.60 per share.
The offer price represented a premium of 21.2 per cent to Dyna-Mac&rsquo s last traded price of S$0.495 on Sep 10.
It also represented premiums of 6.2 per cent, 14.1 per cent, 29.3 per cent and 50 per cent over the volume-weighted average price for the one-month, three-month, six-month and 12-month periods, respectively.
Market watchers, however, said that the offer was too low.
Maybank Securities analyst Jarick Seet felt that the offer price &ndash though fair &ndash was on the lower end of the fair-value range, and advised investors to wait for a revised offer that is either closer to or higher than the brokerage&rsquo s target price of S$0.64 for the stock.
OCBC Investment Research analyst Ada Lim, meanwhile, advised minority shareholders to reject the offer, as the price does not fully reflect Dyna-Mac&rsquo s true value.
Dyna-Mac&rsquo s single-largest shareholder, the estate of founder Desmond Lim, also chimed in.
The estate noted that the offer was not compelling as it did not &ldquo adequately reflect the value and growth potential&rdquo of the oil and gas contractor.
Hanwha on Oct 14 upped its offer to a final price of S$0.67 per share.
Analysts such as Maybank&rsquo s Seet have since advised shareholders to accept the revised offer, which represents a fair exit price despite the current FPSO upcycle. Zico Capital, the independent financial adviser appointed for Hanwha&rsquo s offer for Dyna-Mac, has not yet released its report.
However, Dyna-Mac chief Lim is unfazed by the recommendations.
&ldquo As management, I tell them: &lsquo It&rsquo s a shareholder matter management should not get involved in shareholder matters. But we must do what we do best for the company&rsquo ,&rdquo he said. &ldquo As far as we are concerned, we have to stay very focused on doing our business and then make sure this is fair to all my shareholders. That&rsquo s why we are still building up our businesses, and still doing what we should.&rdquo
Impressive performance
The way Lim sees it, his role as CEO is to keep growing the company and looking after its people. Other things, such as share price performance, will follow.
And this strategy appears to be working.
In the 12 months up to Sep 10 &ndash the day before Hanwha&rsquo s initial offer was announced &ndash Dyna-Mac shares climbed 30.3 per cent. With dividends reinvested, the counter generated total returns of 33 per cent.
In comparison, the benchmark Straits Times Index logged total returns of 15.3 per cent over the same period.
Dyna-Mac&rsquo s impressive growth comes amid plans to expand its production capacity by 70 per cent with new facilities.
It is also exploring opportunities in adjacent sectors &ndash including carbon capture and storage technologies, and hydrogen solutions &ndash to adapt to evolving energy market demands.
Lim, however, insists that any growth must be sustainable.
&ldquo I like the analogy about chicken rice.You just cook 10 chickens, and you finish selling the 10 chickens &ndash that&rsquo s it. You don&rsquo t worry about how many chickens other people can sell,&rdquo he pointed out.
&ldquo You make a profit from 10 chickens, and that&rsquo s good enough. Then you can allocate resources based on that. Even in the worst times, we don&rsquo t lose money because we don&rsquo t take the extra risks.&rdquo
Although he maintains that he is risk-averse, Lim is already gunning for inorganic growth should the Hanwha deal fall through.
&ldquo (If Hanwha doesn&rsquo t) gain management control, then it&rsquo s our turn to go on an M& A,&rdquo he added.
&ldquo We&rsquo re in a strong position to do an M& A. If you are buying using cash, basically you are adding earnings to your own earnings, and EPS (earnings per share) actually increases. So it&rsquo s a no-brainer.&rdquo
Dyna-Mac chief AC Lim stays cool amid takeover offer tussle, remains focused on steady growth
Although he maintains that he is risk-averse, the CEO is already gunning for inorganic expansion should the Hanwha deal fall through
DYNA-MAC chief executive officer Lim Ah Cheng &ndash better known in the industry as AC Lim &ndash deserves every accolade.
After taking the helm in 2020, he managed to bring the beleaguered offshore oil and gas contractor back from the brink of bankruptcy.
So much so that Dyna-Mac is now the subject of a voluntary conditional cash offer from South Korea&rsquo s Hanwha, which wants to take management control at S$0.60 per share.
For Lim, further validation of the turnaround story came from an unlikely source &ndash one of the company&rsquo s main competitors in modular construction for the oil and gas industry.
&ldquo He called me up for lunch and told me: &lsquo Look, a few years ago, we thought we would beat you flat. But after four years, you&rsquo re now probably better than me in terms of FPSO (floating production storage and offloading) modules&rsquo ,&rdquo Lim recounted.
The secret to his success in turning Dyna-Mac around could well be his single-minded approach to growing the business.
Under his leadership, Dyna-Mac grew its order book to S$681.3 million as at June 2024, with deliveries scheduled until the end of FY2026.
Meanwhile, the group&rsquo s net cash position stood at S$307.7 million, with zero bank borrowings.
For the first half of FY2024 ended June, Dyna-Mac&rsquo s earnings more than trebled to S$38.8 million, from S$10.1 million in the corresponding period the year before, as revenue climbed 42.5 per cent to S$259.7 million.
The group attributed the bottom line improvements in H1 to the completion of major projects, improved productivity, and an increase in the volume of projects undertaken.
When viewed across a longer time horizon, Dyna-Mac&rsquo s growth is even more impressive.
For H1 FY2020 &ndash just months after Lim became CEO &ndash the group registered a net loss of S$14.2 million, on revenue of S$51.4 million.
&ldquo When I first joined, we just wanted to survive,&rdquo Lim said. &ldquo I didn&rsquo t want to mess it up and have the company fail under my charge.&rdquo
A year later, in FY2021, Dyna-Mac started to turn a profit.
&ldquo One important thing is to have a business model that is very robust. If we can achieve what I set out to do, I think we will be pretty strong,&rdquo Lim explained.
&ldquo I want to have a company that can go through any crisis, which means you must have the order book and the cash.&rdquo
Attractive target
Dyna-Mac&rsquo s turnaround, however, has made it an attractive target for mergers and acquisitions (M& A).
&ldquo We are very diligent and super-prudent in spending. But that creates another issue: you make yourself too attractive,&rdquo Lim noted.
On Sep 11, South Korean conglomerate Hanwha launched a voluntary conditional cash offer through a special-purpose company to take management control of Dyna-Mac at S$0.60 per share.
The offer price represented a premium of 21.2 per cent to Dyna-Mac&rsquo s last traded price of S$0.495 on Sep 10.
It also represented premiums of 6.2 per cent, 14.1 per cent, 29.3 per cent and 50 per cent over the volume-weighted average price for the one-month, three-month, six-month and 12-month periods, respectively.
Market watchers, however, said that the offer was too low.
Maybank Securities analyst Jarick Seet felt that the offer price &ndash though fair &ndash was on the lower end of the fair-value range, and advised investors to wait for a revised offer that is either closer to or higher than the brokerage&rsquo s target price of S$0.64 for the stock.
OCBC Investment Research analyst Ada Lim, meanwhile, advised minority shareholders to reject the offer, as the price does not fully reflect Dyna-Mac&rsquo s true value.
Dyna-Mac&rsquo s single-largest shareholder, the estate of founder Desmond Lim, also chimed in.
The estate noted that the offer was not compelling as it did not &ldquo adequately reflect the value and growth potential&rdquo of the oil and gas contractor.
Hanwha on Oct 14 upped its offer to a final price of S$0.67 per share.
Analysts such as Maybank&rsquo s Seet have since advised shareholders to accept the revised offer, which represents a fair exit price despite the current FPSO upcycle. Zico Capital, the independent financial adviser appointed for Hanwha&rsquo s offer for Dyna-Mac, has not yet released its report.
However, Dyna-Mac chief Lim is unfazed by the recommendations.
&ldquo As management, I tell them: &lsquo It&rsquo s a shareholder matter management should not get involved in shareholder matters. But we must do what we do best for the company&rsquo ,&rdquo he said. &ldquo As far as we are concerned, we have to stay very focused on doing our business and then make sure this is fair to all my shareholders. That&rsquo s why we are still building up our businesses, and still doing what we should.&rdquo
Impressive performance
The way Lim sees it, his role as CEO is to keep growing the company and looking after its people. Other things, such as share price performance, will follow.
And this strategy appears to be working.
In the 12 months up to Sep 10 &ndash the day before Hanwha&rsquo s initial offer was announced &ndash Dyna-Mac shares climbed 30.3 per cent. With dividends reinvested, the counter generated total returns of 33 per cent.
In comparison, the benchmark Straits Times Index logged total returns of 15.3 per cent over the same period.
Dyna-Mac&rsquo s impressive growth comes amid plans to expand its production capacity by 70 per cent with new facilities.
It is also exploring opportunities in adjacent sectors &ndash including carbon capture and storage technologies, and hydrogen solutions &ndash to adapt to evolving energy market demands.
Lim, however, insists that any growth must be sustainable.
&ldquo I like the analogy about chicken rice.You just cook 10 chickens, and you finish selling the 10 chickens &ndash that&rsquo s it. You don&rsquo t worry about how many chickens other people can sell,&rdquo he pointed out.
&ldquo You make a profit from 10 chickens, and that&rsquo s good enough. Then you can allocate resources based on that. Even in the worst times, we don&rsquo t lose money because we don&rsquo t take the extra risks.&rdquo
Although he maintains that he is risk-averse, Lim is already gunning for inorganic growth should the Hanwha deal fall through.
&ldquo (If Hanwha doesn&rsquo t) gain management control, then it&rsquo s our turn to go on an M& A,&rdquo he added.
&ldquo We&rsquo re in a strong position to do an M& A. If you are buying using cash, basically you are adding earnings to your own earnings, and EPS (earnings per share) actually increases. So it&rsquo s a no-brainer.&rdquo
If d unknown force behind MS backs HW, they are very close to the target 50.1%
The balance of warrants to be converted by 5pm tomorrow (22 Oct) is 19.71 mil.
Lim Estate should have converted all already.
So interesting to see who will convert the 19.71 mil to shares.
HW just annc they bought 32.3m shares with 27m shares at 0.665. Nothing at 0.67.
make good sense.
continue to accumulate at 66
yes, 43m shares done. eat up sell dowm
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