The Austal Limited (ASX: ASB) share price is edging higher again on Wednesday morning.
At the time of writing, the shipbuilder’s shares are up 0.5% to $1.91.
This means the Austal share price is now up by almost 8% since this time last week.
Why is the Austal share price rising this week?
The catalyst for the rise in the Austal share price this week appears to be news that Andrew “Twiggy” Forrest has been building a position in the shipbuilder.
According to a substantial shareholder notice, Twiggy’s investment vehicle, Tattarang Ventures, has become a major Austal shareholder this week.
The release advises that Tattarang acquired an economic interest in 17,731,049 shares (the equivalent of 4.9% of Austal’s shares on issue) pursuant to a cash-settled equity swap transaction. This was at an average price of $1.905 per share, which equates to a total consideration of approximately $33.8 million.
In addition, through a series of on-market purchases of Austal shares up to Monday 28 March, Tattarang acquired a further 11,495,771 shares for a total consideration of approximately $20.7 million or an average of $1.801 per share.
All in all, this gives Twiggy’s investment vehicle an 8.1% interest in the shipbuilder.
Why is Twiggy buying Austal shares?
With the Austal share price losing over half of its value since peaking around $4.50 in September 2019, Tattarang appears to have seen this as an opportunity to snap up a major interest in a company it described as a “leading example of Australian ingenuity.”
Courtesy of the AFR, Tattarang’s chief investment officer John Hartman said: “Austal is a leading example of Australian ingenuity and Tattarang is pleased to join the Perth-based company’s register as a long-term investor.”
Time will tell if Twiggy has made the right call, but you’d be brave to bet against him.
The post Twiggy has been quietly buying up 8% of this ASX-listed company. Why? appeared first on The Motley Fool Australia.
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More reading
- These were the worst performing ASX 200 shares last week
- Why has Macquarie downgraded these 2 ASX shares?
- No deal: Here’s why the Austal (ASX:ASB) share price sank 11% today
- Why Austal, Cettire, Fisher & Paykel Healthcare, and Resimac shares are sinking
- Why Austal, Contact Energy, Nanosonics, and Uniti shares are dropping
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended 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.
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