Austal (ASX:ASB) share price edges higher amid acquisition rumours

Austal (ASX: ASB) shares are edging higher today despite the company quashing rumours it is about to buy a major shipbuilding facility.

| More on:
asx share price on watch represented by ship captain looking through binoculars

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Austal Limited (ASX: ASB) shares are edging higher in midday trading. Having entered a trading halt prior to today's market open, the company's shares are now back trading and have edged 1.29% higher to $2.36. For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently 0.4% lower.

Today's developments come after an Australian diplomat said the company was on the verge of acquiring a major shipbuilding facility.

Let's take a closer look at today's news.

Why the Austal share price is in focus

Investors have been keeping an eye on the Austal share price after it resumed trading around an hour after the market's open. In comments to local media, as reported by the Australian Broadcasting Corporation, the Australian ambassador to the Philippines, Steven Robinson, said Austal was on the verge of completing the takeover of the Hanjin shipyard in Subic Bay.

"I'm hopeful that there will be some progress made in the next month or two that [will] see a finalisation of all those negotiations," Ambassador Robinson said on Monday about the takeover.

"It's still kind of commercially in confidence so I can't get too much into the details, but nevertheless, let's hope that there's a positive outcome, which will see Austal expand further here in the Philippines," he added.

Subic Bay, on the island of Luzon, is located on the geopolitically important South China Sea. Tensions between the Philippines and China have ratcheted up in recent days, with the Philippines Foreign Minister asking Chinese ships to leave the disputed zone.

At the same time as rumours circulate around Austal's investment in the Philippines, the company is divesting from its Chinese enterprises.

Austal responds

In response to media speculation, and in light of the ambassador's comments, Austal released a statement to the ASX. In it, Austal said its position on the Hanjin shipyard has not changed since August 2019.

"There is no certainty that any additional expansion opportunities will be either pursued or completed," the statement said.

In the statement, Austal also said its investors should be "well aware of the Company's strategy to move into steel shipbuilding…"

Austal share price snapshot

Over the past 12 months, Austal shares have fallen in value by around 18%. Since the beginning of the year, they have also fallen by around 13%.

Given the current Austal share price, the company has a market capitalisation of $837.8 million.

Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Industrials Shares

American soldier in military uniform using laptop for drone controlling.
Industrials Shares

Are ASX defence shares the next big opportunity?

Many analysts at Sydney's ASX Investor Day spoke of defence as an emerging global investment theme.

Read more »

Army man and woman on digital devices.
Industrials Shares

ASX defence stock jumps 10% on US army order

Let's see what is getting investors excited on Wednesday.

Read more »

US navy ship sailing along at sunset.
Industrials Shares

Austal share price smashes new record high as takeover rumours swirl again

Investors were buying up shares in this Australian global defence shipbuilder today.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why Macquarie expects this ASX 200 dividend stock to keep outperforming

Macquarie has tipped this ASX 200 dividend stock to outperform. Let’s find out why.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Mergers & Acquisitions

Why are Brickworks shares up 18% today?

Let's find out what is getting investors excited this morning.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Industrials Shares

Key takeaways from ALS shares results according to Macquarie

ALS announced an underlying net profit after tax (NPAT) of $312 million this week.

Read more »

A woman sits crossed legged on seats at an airport holding her ticket and smiling.
Industrials Shares

What does Macquarie think Auckland International Airport shares are worth?

Is it time to invest in this unique holding?

Read more »