Takeover target MMA Offshore’s stellar share price run has forced its Singapore-based suitor to cough up more cash in a bid to secure a $1 billion-plus deal.
The offshore energy maintenance contractor entered into a scheme implementation deed in late March priced at $2.60 a share with Cyan MMA Holdings, a subsidiary of private equity firm Seraya Partners.
But the company has since traded well above that price, spurred on by a trading update earlier this week that tipped higher-than-forecast earnings for the second half of the financial year.
MMA has a fleet of 20 vessels with more than 1100 employees on its books and has been expanding beyond its core offshore oil and gas maintenance services in recent years, including into renewables like offshore wind.
Servicing offshore wind farms constitutes about a quarter of MMA’s revenue but has significantly enhanced its attractiveness as a long-term investment proposition.
Cyan responded to the stoked share price on Thursday with a best and final offer of an extra 10¢ a share, putting it just above Wednesday’s closing price of $2.69 — but 15 per cent higher than the stock’s value before the initial proposal.
Major backers Thorney Investment Group and the MMA board, which has been in talks with Cyan since October last year, continue to back the deal in the absence of a superior offer.
Scheme booklets are due to be sent to investors on Friday, with a vote expected on July 1.
MMA’s trading update said earnings visibility and performance across the second half had continued to improve, and it had also secured a number of project completion and negotiated payments.
“The business is focusing on building its backlog of contracted work for FY2025 and securing longer term contract positions to improve the overall stability of earnings for the coming years,” it said.