The delisting of Singapore-based offshore oil and gas contractor Dyna-Mac, following its acquisition by South Korea’s Hanwha Group, has sparked debate about the company’s future and the implications for shareholders. While some investors might lament the exit, recent developments suggest their decision to cash out may have been prudent.
A Complex Takeover Saga
Hanwha Ocean SG, a special-purpose vehicle under Hanwha Ocean and Hanwha Aerospace, launched its cash offer for Dyna-Mac shares in September 2024, initially offering S$0.60 per share. The offer later increased to S$0.67 per share after resistance from analysts and major shareholders, including the estate of Dyna-Mac’s late founder Desmond Lim, who argued the offer undervalued the company’s growth potential.
Despite assurances that the company might not be taken private, Hanwha’s conditions for trading suspension and potential delisting were clearly outlined. By November, Hanwha had secured over 95% of shares, triggering compulsory acquisition of the remaining shares and delisting the company.
Leadership Shake-Up Sparks Concerns
Just weeks after the delisting, Dyna-Mac’s board, now controlled by Hanwha, announced the abrupt termination of CEO Lim Ah Cheng on Dec. 16. Lim, widely regarded as the architect of Dyna-Mac’s turnaround, was credited with rescuing the company from near bankruptcy in 2020 and driving record growth.
Under Lim’s leadership, Dyna-Mac’s revenue soared from S$51.4 million in H1 2020 to S$259.7 million in H1 2024, with earnings of S$38.8 million and a strong order book of S$681.3 million as of mid-2024. His strategic acumen, including efforts to secure workers during the pandemic, cemented his reputation as a transformational leader.
The decision to remove Lim has raised questions about the company’s strategic direction. “Take away Lim, and Dyna-Mac is arguably just a collection of fabrication yards and cash reserves,” remarked one industry observer.
Uncertain Future for Dyna-Mac
Dyna-Mac’s next steps appear less clear. The company is actively seeking a new CEO, with a job listing offering a salary of S$15,000 to S$22,000 per month—less than half of Lim’s annual base pay of S$593,904 in 2023. The tight timeline to find a suitable candidate before the listing expires on Jan. 14 has led to speculation that an internal or associated Hanwha candidate may eventually fill the role.
Meanwhile, Lim’s termination payments remain under negotiation, adding another layer of uncertainty to the company’s immediate future.
Lessons for Investors Amid Rising M&A Activity
For shareholders, the delisting and subsequent events highlight the importance of scrutinizing merger and acquisition (M&A) offers, particularly those involving changes in controlling ownership. Hanwha’s strategic shifts post-acquisition demonstrate how such deals can lead to abrupt management changes that impact company stability.
With M&A activity expected to accelerate in 2025, investors are advised to evaluate offers carefully, especially when management continuity and long-term strategy are at stake.
Dyna-Mac’s story serves as a reminder: while cashing out during an acquisition can provide immediate returns, the ripple effects of leadership and strategic overhauls often paint a more complex picture of what shareholders leave behind.
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