Did a bit of homework and thought I'd share it:

• Tattarang (Andrew Forrest) currently hold about 20% of the register at an average price of $1.97.
• Copia Investment Partners have just under 10% at $1.81.

I keep these things in mind when assessing the probabilities of M&A ever eventuating. Twiggy will have a very long-term mindset so is unlikely to acquiesce to any bid that "fairly" prices that company but I still think someone like Hanwha is in a position to pay overs and extract value in the long run.

Maintaining the $3.03 price target for now and will lightly add to the position below $2.20 and more at $2.00 assuming no thesis break.

There has been extensive reporting in the AFR about Hanwha's interesting in acquiring the shipbuilder first really hitting the papers in July 2023. Since then, the valuation has oscillated between $800m and $1bn.

Hanwha is a Korean conglomerate that in 2023 acquired a controlling stake in Daewoo Shipbuilding & Marine Engineering.

In December 2023, MINDEF R. Marles signaled that any sale would have to pass security considerations. Reporting yesterday has Marles saying that the Albanese government has no concerns with the bid. The same article quoted an "estimated offer" of around $1.5bn, which would be a significant premium to the current market valuation of around $860m and a higher offer than originally quoted on 11 April (~$1bn).

If you're wondering why Hanwha would pay this much, I think the big three Korean shipbuilders are in an arms race, and Austal as AUKUS tailwinds not properly priced into their future along with possible undervalued assets around the world. The contracts are of strategic advantage to Hanwha over their main domestic competitors like Samsung Heavy Industries. It also gives them global yards to handle other orders they might have, especially if Austal is under-utilized.

I guess what I'm saying is, don't price this like an Aussie small cap, price it like you're a huge Korean shipbuilder under pressure with a growing order book and aggressive competition.

Appendix

1. https://www.kedglobal.com/shipping-shipbuilding/newsView/ked202311260002
2. https://asia.nikkei.com/Business/Engineering-Construction/South-Korean-shipbuilders-fulfill-discounted-orders-to-lift-earnings
3. https://maritime-executive.com/article/korean-shipbuilders-orders-reach-12-year-high-adding-to-country-s-exports