Analysts downgrade MMA Offshore after $1bn takeover bid
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The news: Shaw and Partners analysts have downgraded their rating for MMA Offshore after the vessel owner agreed to a takeover on Monday by Seraya Partners subsidiary Cyan Renewables.
The numbers: Brokerage firm Shaw and Partners said that Singapore-based Cyan's scheme price of $2.60 per share was in line with its valuation for MMA and that the acquisition was likely, leading the analysts to downgrade their rating from "buy" to "hold".
The analysts said the agreed price translated to a 5.8x FY25 EBITDA and was still below the company's historic trading range of six to eight times EBITDA.
On Monday, MMA's board unanimously recommended Cyan's takeover offer, which values the company at approximately $1.03 billion. MMA shares, which temporarily climbed more than 11% to $2.62 on Monday afternoon following the news, were up 0.2% to $2.61 at 12:30pm on Tuesday.
The context: Shaw and Partners analysts made no changes to MMA's earnings or valuation and noted it is unlikely for another suitor to make a bid for the Perth-based company.
The offer was also consistent with Citi's target price for MMA. Citi analysts noted "the deal looks better for the buyer than for shareholders".
"Whether the deal is fair ultimately comes down to an investor's view of the cycle and how much reduced earnings volatility from diversification should be paid for today," they said.
The sources: Citi research, Shaw and Partners research
