* Fincantieri to buy 50.75 pct STX OSV stake at S$1.22 each
* To launch offer for rest of STX OSV after April 2013 at same price
* Offer was at 12.9 pct discount to last traded price
* Analysts say offer undervalues STX OSV
* STX OSV shares down 4.6 pct (Adds analyst comments, share price update)
By Charmian Kok
SINGAPORE, Dec 21 Italian shipbuilder Fincantieri SpA plans to acquire Singapore-listed STX OSV Holdings for $1.2 billion to compete better in an industry dominated by South Korean companies.
Fincantieri said on Friday it will buy a 50.75 percent stake in offshore vessel builder STX OSV from STX Europe, a unit of South Korea's STX Corp, for S$730 million ($598.90 million), or S$1.22 a share.
After the completion of the stake purchase by end-April, Fincantieri will launch a mandatory offer for the remaining shares in STX OSV, also at S$1.22 each.
The Italian company expects the deal to make it one of the world's top five shipbuilders. Hyundai Heavy Industries Co Ltd and Samsung Heavy Industries Co Ltd are the world's top two shipbuilders.
The purchase price represents a discount of 12.9 percent to STX OSV's closing stock price on Dec. 20, triggering some scepticism from analysts about the public offer succeeding in full.
"The sale price was somewhat low considering that STX OSV has a relatively strong balance sheet," DMG & Partners said in a note. The brokerage does not expect Fincantieri's general offer, which it said was unattractive to minority shareholders, to succeed.
STX OSV shares were down 4.6 percent at S$1.335 in Friday morning trading after briefly being suspended. Still, they were up 12.9 percent since the start of the year.
Cash-strapped STX Corp said in August it had chosen Fincantieri as the preferred bidder for its stake in STX OSV. The highly-leveraged South Korean company has been selling stakes in its affiliates, including STX Energy, to raise cash.
STX OSV was listed in Singapore at the end of 2010. It has posted average revenues of about 1.6 billion euros ($2.12 billion) in the last three years, Fincantieri said in a statement.
Brokerage CIMB described the offer as "low ball" valuing the company at 6.5 times its 2013 price-to-earnings and 2.2 times its 2012 price-to-book value. That compares with a 12-month forward price-to-earnings of 10.3 times for Hyundai Heavy and 15.7 times for Ezion Holdings Ltd, according to StarMine data.
"Though we understand Korean parent company STX Corp's urgency to restructure its balance sheet, the sale price undervalues STX OSV," CIMB said in a research report.
After buying STX OSV, Fincantieri will own 21 shipyards, with nearly 20,000 employees, generating revenues of 4 billion euros, the Italian shipbuilder said.
"Fincantieri will become one of the top five shipbuilders worldwide and the leading western producer capable of competing with its Asian peers," it said.
Fincantieri expects the S$1.45 billion deal to be financed from internal resources and a syndicate loan provided by several banks including BNP Paribas and Unicredit. ($1 = 0.7555 euros) ($1 = 1.2189 Singapore dollars) (Editing by Muralikumar Anantharaman)