Australia's Dyno Nobel may acquire stake in Fabchem - Macquarie |
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Tue, 16 Jan 2007 00:09
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SYDNEY (XFN-ASIA) - Dyno Nobel Ltd may acquire a 29.9 pct stake in Singapore-listed Fabchem China Ltd even though it ended talks about buying into the explosives maker last September, saying the proposed acquisition did not meet its investment criteria, Macquarie Equities said in a note to clients.Macquarie said Fabchem remains a strategically positive investment for Dyno Nobel giving it a strong foothold in the high growth Chinese explosives market.The size of the Chinese explosives market is estimated to be at least one bln usd and is growing at 6-10 pct per annum.Last week, Fabchem said its controlling shareholders are now in the final stages of negotiations with a potential investor on the possible sale of up to a 29.9 pct stake in the company.Fabchem also noted that the parties have agreed to reach an agreement on the terms of any acquisition by Jan 16, 'failing which the exclusivity agreement with this third party will lapse.'Macquarie said Dyno Nobel would not confirm it is the potential investor, adding that negotiations will have to result in more favorable sale terms for it to proceed.The firm said rival Australian-listed explosives maker, Orica Ltd, has also had talks with Fabchem.Based on Fabchem's current market capitialization of 150 mln sgd, a 29.9 pct stake is equivalent to 37mln aud.(1 usd = 1.27 aud, 1.54 sgd)bruce.hextall@xfn.com
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