Australian shipbuilder Austal (ASX:ASB) received a non-binding, conditional proposal from a unit of South Korea's Hanwha Group to acquire its U.S. operations for an indicative enterprise value of up to $1.20 billion.
Hanwha Defence USA has offered $1.05 billion to $1.20 billion for the relevant Austal USA entities and operations, according to a Tuesday press release.
The proposal remains subject to Hanwha completing due diligence, obtaining regulatory approvals, and agreeing on definitive transaction documents.
Under the proposal, Hanwha would acquire 100% of the shares in the relevant Austal USA holding entities, or such other transaction structure as may be agreed.
Austal said the offer does not include any publicly traded shares in the company or its core Australasia operations in Australia, the Philippines, and Vietnam.
Its sovereign shipbuilding mandate in Australia under its strategic agreement with the Commonwealth would also remain intact and unaffected by the proposal.
The Austal board and its advisers have assessed the proposal and determined that it merits further evaluation.
Hanwha will have a four-week period, starting once the requested due diligence information is made available, to review Austal USA's business and contracts, engage with key U.S. government counterparties, and advance transaction documentation.
"Should a more certain proposal be received from Hanwha, that proposal will be assessed by the Austal Board, having regard to the inherent value of Austal USA, and acting in the best interest of all Austal shareholders," Austal said.
The proposal is not subject to a financing condition. However, Austal said there is no certainty that Hanwha will submit a further proposal or that any proposal will ultimately result in a definitive agreement.
