Austal Limited (ASX:ASB) shares jumped 6% to $4.61 after the Australian shipbuilder confirmed its board and advisers would consider a higher proposal for its US operations from Miami-based Wildcat Infrastructure.
Wildcat has submitted a non-binding proposal valuing Austal USA at between US$1.25 billion and US$1.35 billion on a cash-free, debt-free basis, exceeding an earlier approach from South Korea’s Hanwha.
The proposal covers Austal’s US entities and Mobile, Alabama, shipyard, with Wildcat indicating it would operate the business as a standalone platform while retaining the Austal brand and US operations.
Higher bid increases competition
Wildcat’s approach adds competitive tension around Austal USA, which has attracted interest from several potential buyers.
Hanwha, which already owns 19.9% of Austal, previously valued the US division at between US$1.05 billion and US$1.2 billion on an enterprise basis.
Its August proposal implied a broader valuation of about $2.74 billion, or $6.50 per Austal share.
Hanwha remains engaged in due diligence on the US business, while Austal said its board and advisers would assess Wildcat’s proposal.
Wildcat Infrastructure is sponsored by Wildcat Equity Partners, a US family investment firm focused on infrastructure, energy and telecommunications.
Strategic US operation
Austal USA operates from Mobile and San Diego and is an important supplier to the US defence sector.
The business has a partnership with General Dynamics Electric Boat producing command and control systems modules and electronic deck modules for the Virginia-class and Columbia-class submarine programs.
The US division has also weighed on Austal’s recent financial performance, recording a $202.8 million EBIT loss after cost overruns across several defence programs.
Austal reported a $53.6 million full-year loss, although its Australian operations delivered record EBIT of $85.3 million.
About Austal
Austal designs, builds and supports defence and commercial vessels, with operations in Australia, the United States and the Philippines.
The company’s strategic importance is underscored by the Australian Government’s “golden share”, which provides national security protections over the Australian business.
Austal is also around 19% owned by Andrew Forrest’s Tattarang, alongside Hanwha’s 19.9% stake.
