Ezion

Ezion: CIMB says Ezion could see longer-term capital appreciation from its investment in 44% of YHM for $5.76 m. Notes, the acquisition of what is essentially a shell company allows Ezion to tap the capital markets so that it can extend its range of services for its clients without diluting its core businesses or overextending its resources. Highlights, as Ezion gains traction with clients, it is getting more requests for ancillary-support activities. These requests can be directed towards YHM while Ezion rivets its attention to its two core businesses of liftboats and marine logistics for Australian LNG projects. Expects YHM's business model will be similar and complementary to Ezion's, with the key difference to be for YHM to own a fleet of diverse, customized assets to service oil customers. CIMB expects the deal to have negligible impact on Ezion's business, given the minor dilution and its scale. Keeps Ezion at Outperform with TP $1.64; it doesn't rate YHM. Ezion is down 4.1% at $1.30. YHM is up 60% at $0.18 in strong volume accounting for nearly 46% of shares changing hands on the SGX. The share price action of both counters is reflective of a number of historical M&A situations, in which the target co's shares are bought up, and the acquirer's shares sold down.