Austal Ltd (ASB.AU) soared 6.51% intraday on Tuesday after the Australian shipbuilder announced it had received a non-binding conditional offer from Hanwha Defence USA to acquire its U.S. operations for an indicative enterprise value of up to US$1.20 billion.

The offer, valued between US$1.05 billion and US$1.20 billion on a cash and debt-free basis, excludes Austal’s publicly traded shares and its core Australasia operations. The company’s board has approved a four-week due diligence period for the South Korean conglomerate, stating the proposal merits further evaluation.

The positive market reaction came despite Austal also reporting an expected unaudited group EBIT loss of A$113 million for fiscal 2026, reflecting higher anticipated losses on several U.S. shipbuilding programs. Investors appeared to focus on the potential value unlock from the proposed sale of the struggling U.S. unit.