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United Engineers Makes Competing S$1.1 Billion Offer for WBL

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Jan. 30 (Bloomberg) -- United Engineers Ltd. offered to buy WBL Corp., valuing the company with businesses from technology to property at S$1.1 billion ($890 million) and topping an earlier bid by Straits Trading Co.

United Engineers will offer S$4 a share in cash for the remaining 61.7 percent of WBL that the company and its partners don’t already own, as well as WBL’s convertible bonds, it said today in a statement to the Singapore Exchange. The proposal is higher than an offer by Straits Trading, which bid S$3.41 a share in cash or 1.07 of new shares.

Oversea-Chinese Banking Corp., Singapore’s second-biggest bank by assets, and its partners are working with United Engineers on its bid, according to the statement. OCBC and its partners control 38.3 percent of WBL and S$12.8 million in bonds convertible into a 1.99 percent stake in WBL. OCBC said last month it was reviewing options for its stake as the Straits Trading offer was below WBL’s net asset value, the Straits Times said, citing Chief Financial Officer Darren Tan.

“UE has been exploring opportunities to make a substantial acquisition that will be transformational in nature,” Jackson Yap, managing director and chief executive officer at United Engineers, an engineering and real estate company, said in the statement. “WBL will give us the scale and scope, as well as the geographic diversification, to achieve our strategic ambition.”

Former Image

Straits Trading said in a statement on Jan. 16 that it would hold 44.55 percent of WBL and that shareholders approved making a cash-or-share offer for rest of the company.

“UE is shaking off its former image and highly committed in creating positive shareholder value,” Alison Fok, an analyst at Maybank Kim Eng Securities, said in a note to investors today. “It also shows that OCBC is unlikely to divest any of its stakes, unless the share price reflects its true value. However, in the short term, we will see some pressure on the share price until this deal blows over.”

United Engineers has fallen 1.2 percent this year in Singapore trading, compared with the 3.5 percent gain in the benchmark Straits Times Index. WBL increased 5.3 percent in the same period and last traded at S$4.20 yesterday before being halted for the announcement.

To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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