Insights

Fundie reveals under-the-radar ASX 300 share ripe for takeover

This infrastructure business may be an opportunity.
The post Fundie reveals under-the-radar ASX 300 share ripe for takeover appeared first on The Motley Fool Australia. –

One fund manager has picked out an S&P/ASX 300 Index (ASX: XKO) share that could be a prime takeover target.

Fundies are always looking for opportunities. For most investment picks, investors are looking for ASX shares that could rise in value and/or pay attractive income to shareholders.

However, the smaller we look down the market capitalisation list, the easier it could be for an external party to buy the whole business.

For example, Sydney Airport was recently taken off the ASX boards in a multibillion-dollar takeover. Big deals can happen.

There have been plenty of other takeovers over the years, including MYOB, Australian Pharmaceutical Industries (API) and Crown.

It’s hard to say for sure if a business is going to become a takeover target, but if it has attractive assets which are not valued highly by the market, or has an attractive earnings profile, then other businesses, superannuation funds or private equity could want to buy that company.

Which ASX 300 share could be a takeover target?

The fund manager Tim Canham from investment outfit First Sentier has named a potential takeover target.

Talking to the Australian Financial Review, Canham was asked if he thinks there are any ASX small cap shares that make appealing takeover targets.

The fund manager named Dalrymple Bay Infrastructure Ltd (ASX: DBI) as that potential opportunity.   

What does it do?

The ASX 300 share describes itself as a “foundation asset”. The Dalrymple Bay Terminal (DBT) aims to provide “safe and efficient” port infrastructure and services for producers and consumers of “high-quality Australian coal exports”.

DBT is supposedly the world’s largest metallurgical coal export facility. It serves as the “global gateway” from the Bowen Basin in Queensland, and the business states it’s a “critical link” in the global steelmaking supply chain.

There are options for capacity expansions to meet “expected strong export demand”.

For shareholders, DBI wants to provide distributions, capital growth, and it will continue to invest.

Why could it be a takeover target?

Canham said, according to the AFR:

We have seen most quality infrastructure stocks picked up by private capital and what I would call “patient capital”. On an attractive yield and with take-or-pay revenues, it looks very defensive in this market environment. The potential for an uplift in its user charges also remains.

According to Morgans, Dalrymple Bay Infrastructure is going to pay a dividend yield of 8.9%.

Share price snapshot

The Dalrymple Bay Infrastructure share price is up around 2% since the start of 2022 and 5% over the past month. However, it is down 5% over the past year.

It closed flat on Thursday at $2.07, giving the ASX 300 share a market cap of $1.02 billion.

The post Fundie reveals under-the-radar ASX 300 share ripe for takeover appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Why Macquarie warns consensus earnings growth for ASX 300 shares in FY23 is ‘optimistic’
2 ASX 300 shares rocking new 52-week highs on Monday
Is Adairs considered an ASX 300 dividend share?
I think these 2 ETFs are long-term buys
Expert names ASX share that could fly 67% higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info