Singaporean offshore player Cyan Renewables has launched a AUD 1.03bn ($680m) takeover bid for Australia’s MMA Offshore.
The deal, if approved by MMA’s shareholders, will be the largest investment the private equity-backed market newcomer has made in the offshore sector since its launch two years ago.
MMA announced on Monday that Cyan is offering AUD 2.60 in cash for each of its ordinary shares and performance rights, an 11% premium to the closing share price of AUD 2.35 per MMA share on 22 March 2024 and a 91% premium to the company’s net tangible assets as at 31 December 2023.
ASX-listed MMA’s board has given its unanimous approval for Cyan’s takeover offer, claiming the deal is in the best interests of shareholders as the price offered represents a 31% premium to the 90-day volume weighted average share price, thus providing MMA shareholders with “certainty” in the form of a cash payment while removing the risks associated with operating in a cyclical industry.
Commenting on the offer, MMA chairman Ian Macliver said the two companies had been in discussions since October 2023 and the MMA board had now reached the “required level of confidence” to enter into a scheme implementation deed (SID) with Cyan MMA Holdings, the vehicle that Cyan will use to acquire the company.
“There has been increased interest in MMA as our strategy to diversify our operations and deleverage the business, together with our improved earnings, has seen the share price rise more than 80% over the past five months,” Macliver said.
“Cyan intends to retain MMA’s workforce, clients, sites and contracts and to invest capital in growing the business. MMA provides Cyan with exposure to Asia and, importantly, Australia as Cyan pursues equity investment to create a leading global energy transition-focused offshore marine business.”
The AUD 1.03bn that Cyan is splashing out on MMA buys it a fleet of 20 offshore vessels that includes large multipurpose support and platform supply vessels, and medium-size anchor-handling tug supply vessels.
It also buys Cyan a company with an established track record and lucrative long-term contracts in the cabotage-protected Australian offshore market.
The takeover deal is subject to regulatory and shareholder approval, with a July 2024 timeline set for the deal’s completion.
The SID agreement entered by the two companies allows MMA to accept a superior proposal. The agreement also includes termination rights and circumstances under which either may terminate the deal upon payment of an AUD 10.25m break fee.
MMA has engaged Rothschild & Co as its financial adviser and Thomson Geer as its legal adviser for the transaction, while UBS is acting as financial adviser and Allens as legal adviser to Cyan MMA, Cyan Renewables and its shareholder Seraya Partners.
Seraya Partners launched Cyan Renewables in 2022 with an aim to invest $1bn in the offshore sector, focusing primarily on offshore wind assets.
The company has splashed its cash on acquiring existing ships and ordering new vessels.
In January, Seraya Partners acquired a 75% stake in Sentinel Marine, a UK-based maritime environmental response vessel operator with a fleet of 13 offshore support and emergency response and rescue vessels.
Cyan chairman Seraya Partners’ chief investment officer James Chern described the Sentinel Marine stake as an “important milestone” as it gave the company access to the fast-growing offshore wind market in the UK.
