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Australia’s largest shipbuilder Austal has confirmed it has held “preliminary” talks with a Florida-based investment firm that wants to buy its massive US subsidiary, throwing uncertainty over a rival $1.7 billion offer from South Korean defence giant Hanwha.

The West Australian newspaper on Monday revealed little-known American company Wildcat Infrastructure was preparing this week to unveil its takeover bid for Austal USA’s operations, prompting urgent discussions in boardrooms across the world.

For months Tokyo has been nervously monitoring Hanwha’s attempts to buy Austal USA, after the Seoul-based company last year increased its stake in the Australian arm of the business, which is soon slated to build Japanese-designed warships at its Henderson facility in WA.

In a statement to the Australian Stock Exchange (ASX) on Monday morning, Austal noted “media in the West Australian newspaper regarding a potential proposal from Wildcat Infrastructure”.

“Austal confirms it has held an initial, preliminary discussion with Wildcat Infrastructure however has not received any proposal,” the statement authorised by Austal CEO Paddy Gregg said.

“The Company will provide further updates to the market in accordance with its disclosure obligations under the ASX Listing Rules if the position changes.”

Austal shares initially rose 1.4 per cent on Monday to $4.39, but stocks in the Perth-based company have roughly halved in value over the past year event though it remains one of the ASX’s biggest defence companies with a market capitalisation of almost $1.9 billion.

Last month Hanwha Defense USA, a subsidiary of Hanwha Aerospace, detailed its preliminary, non-binding offer of between $1.49 and $1.7 billion to buy Austal USA, which supplies ships to the Pentagon from its facility in Mobile, Alabama.

Over recent weeks figures in the United States have claimed the Trump administration has been giving mixed signals over whether it wants a South Korean company to seize control of Austal USA, with the Pentagon stalling progress on the deal.

Figures familiar with the new takeover bid believe the Trump administration could look more favourably towards an American-owned business acquiring Austal USA, rather than the only other current offer from Hanwha.

Other sources have told The Nightly that Hanwha has briefed Australian investors that they were “playing hardball” for the US business, and would walk away if their offer wasn’t accepted, leaving Austal to “bleed cash until their offer was accepted”.

Austal CEO Paddy Gregg last week insisted there was “great momentum” behind Hanwha’s proposal to buy the Australian company’s Alabama-based operations, and he thought the deal enjoyed support from “senior people in the Department of War”.

“The receipt of an indicative, non-binding and conditional proposal from Hanwha Defense USA to acquire Austal USA was a major development this year,” Mr Gregg told investors.

“Austal has determined that it merits further evaluation and we’ve approved Hanwha to undertake some due diligence to strengthen the certainty of any proposal.”

Austal USA is the largest Australian-owned defence company operating in the country and has built several different ships for its navy, including the Independence-variant Littoral Combat Ships and Spearhead-class Expeditionary Fast Transport vessels.

For several years Hanwha, one of South Korea’s biggest companies, has been trying to acquire Austal and is now one of the company’s largest shareholders behind Fortescue executive chairman Andrew Forrest.

In December, Treasurer Jim Chalmers gave approval for Hanwha to also double its ownership of Austal’s Henderson-based Australian operations, months after the firm had entered a strategic shipbuilding agreement with the Commonwealth.

The move allowing Hanwha a 19.9 percent stake in Australia’s strategic shipbuilder followed formal objections raised by Japan’s Defence Ministry on at least two occasions to the Defence Department in Canberra, as revealed by the West in November.

A spokesperson for Defence Minister Richard Marles declined to comment on the future ownership of Austal, while Hanwha and Wildcat Infrastructure have also not responded to questions from The Nightly.

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