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Since Dyno is paying at $0.52 per share at the present rate of $0.645, can anyone advice will this counter is be going down ?
Australia's Dyno Nobel , the world's second-biggest explosives firm, said on Tuesday it had acquired a 29.9% stake for US$31.8 million.
Dyno Nobel said in a statement it would pay $0.52 per Fabchem share, an additional $0.13 based on 2008 profit targets and $0.05 based on Fabchem obtaining an export license.
Fabchem earlier on Friday said in a statement that it had
agreed on exclusive negotiations with an unidentified investor
and that the parties would reach an agreement on the terms of a
deal by next Tuesday.
Nobel sounds familiar. That's because Dyno Nobel was started by dynamite inventor and Nobel Prize founder Alfred Nobel, and the company has a history of more than 200 years.
In 2005, a Macquarie Bank-led
The consortium split the company along geographic lines, retained the Australian and North American business, and sold 57% of the shares in an IPO. It sold the remaining assets to Orica for US$685 million.
It is set to sell a stake of up to 29.9% to Dyno Nobel, a source familiar with the talks said on Friday.
The source, speaking to Reuters on condition of anonymity, told Reuters that the deal, which is expected to be agreed next week, would give the Australian firm access to the fast-growing Chinese market.
The possible sale, which would be worth around $47 million based on Fabchem's current share price, follows talks with both Dyno and its rival Orica over the last year.
Orica will buy UK-based mining services firm Minova for A$857m, boosting its business in the buoyant resources sector.
This will reduce the chance of the potential acquisition of shares in Fabchem.
Insiders and other people in the know got first-hand info.
feeling like someone is in hurry to sell off stake even before 6 months lock up period is over. do not get caught on the wrong like last time hor
So that why this counter halt trading.... where do ppl get news even before the company post the news on SGX ?
It's in discussions with another party relating to the potential acquisition of shares in the company.
any idea where this stock is heading now?
Dyno Nobel
other related operations of John W. Angelini Blasting Inc. It did
not disclose the price of the business, based in Florida.
"The parties were unable to agree upon acquisition terms that
would have represented a favourable outcome for Dyno Nobel
shareholders," Dyno said in a statement.
It has ceased discussion with parties relating to the proprosed acquisition of shares in the company.
There's promising demand for explosive devices in PRC and China. There are high barriers to entry as the industry is regulated by the Commission of Science, Technology and Industry for National Defense and the issue of permits and licences is subject to strict review procedures by the authorities.
The Group's organic growth from FY07 onwards will be boosted by the increase in production capacity for boosters (up 50%) and detonating cords (up 40%) wef Oct 06. The new production facility for sesmic charges, operational in May 06 will further enhance aernings by an estimated RMB 30.5m per year. An early conclusion of M&A talks will enhance the Group's potential.
At Fri's price of $0.61, it was trading at prospective PERs of 10.6x for FY07 and 8.1x for FY08. Based on valuation of 17x FY07 earnings (taking average PER for Orica and Dyno), Westcomb's 12-month target for Fabchem would be $0.98.
If Dyno Nobel is successful, the acquisition would translate into new sales channels and technology transfer for Fabchem. While markets are talking up the possibility of a bidding war ensuing for Fabchem shares, I think this is unlikely. Fabchem has reportedly ended discussions with Orica, which has no incentive to overpay for Fabchem given its exposure to the Chinese explosives market via a JV in Shandong with the Chinese government.
In view of the speculation of the bidding war, it may be time to take profit.
Fabchem is not on top 20 sgx list and down -2cents to $0.75
Take a good look at SES-SGX top 20 listed play last Friday. A possible rotational play is on China milk & landwind, while China Petro & unfiber has run abit too fast liao.
rotational play.. guess the next target , and we make money together ..
The world's No. 1 and No. 2 largest explosives firms, Orica and Dyno Nobel respectively, are said to be interested in acquiring a strategic stake in Fabchem, which makes explosives and detonators in the mining industry. A Reuters report said the company earlier this week ended acquisition talks with Orica and Dyno would be the second firm showing interest.
Fabchem is positioned to profit from the strong activity in the oil & gas, and coal industries of China.
Orica might be more willing to pay more as it is a bigger customer of Fabchem than Dyno.
This should keep Fabchem's price firm.
At 64c, its PER is about 16. Industry leader, Australia-listed Orica trades at historic PE of 28.6.
Fabchem is tiny compared to its competitors. Orica has a market value of $8.8 bln, while Dyno Nobel's market cap is $2.46 bln. Fabchem is only valued at $150 mln.
Ha ha... ic... I stand corrected.