MMA Offshore, an ASX-listed marine services provider specializing in the oil and gas industry, was on Monday the subject of a $1 billion acquisition by Cyan MMA Holdings, a subsidiary of Cyan Renewables. Cyan Renewables is a shipping portfolio company of Seraya Partners, a Singapore-based private equity infrastructure fund focused on energy transition and digital infrastructure.
MMA has been in discussions with Cyan since October and has concluded a plan implementation agreement. The board unanimously recommended that shareholders vote in favor of the plan.
The $2.60 bid represents an 11% premium to MMA Offshore's Friday closing price. The stock rose 10% in the first two hours of trading on Monday and is currently trading just above the bid price, with the market likely to see the bid succeed or the board to request a raise. This suggests that he is thinking that.
MMA powerhouses also include Alex Weislitz's Thorney Investment Group and Michael Kum's Halom Investments. Hallom led a national campaign against the company in 2017, demanding the removal of its chairman and chief executive, but later sold his stake in the company from 15.4% to 7.8%.
Pendal is a top 10 shareholder and has strengthened its position on the back of its recent first half results, as it becomes more confident in MMA's growth trajectory.
During an MMA match
Wilson Asset Management, a long-time major shareholder, has taken advantage of MMA Offshore's strong share price gains, falling below the 5% threshold in October. Lead portfolio manager Oscar Oberg took a contrary view, saying management's decision to accept the offer was “wise”.
He also praised MMA's long-serving management team and board for turning around the company, which he described as moribund after undergoing two recapitalizations amid high levels of debt in the late 2010s.
Oberg wouldn't be surprised if, in the current state of MMA, another competing organization emerges. He points to a shortage of marine patrol vessels and the company's ability to increase prices for its services.
Weislitz told StreetTalk that Sawhney supports Cyan's bid unless there is a higher offer. He also praised the management team for its turnaround, noting that the fund provided significant financial support when the sector was in a cyclical downturn.
“David Ross and his management team have done a great job and now the cycle has turned,” Weislitz said. “It would not be surprising to see more activity in this area.”
MMA stock has increased 140% over the past year, due in part to increased demand for its services and services.&Adopted into the P/ASX 300 index in March.
