WBL Rises Above United Engineers’ Revised Bid: Singapore Mover

Shares of WBL Corp., a Singapore-based conglomerate with investments from China property to luxury car dealerships, rose the most in six weeks today to trade above an increased bid by United Engineers Ltd.

The stock added as much as 4.8 percent to S$4.34 in Singapore, the biggest gain since Jan. 31. United Engineers raised its offer to S$4.15 a share in cash from S$4 after its partners exchanged its WBL convertible bonds into shares, the company said yesterday in a statement to the Singapore Exchange.

WBL, whose largest shareholder Straits Trading Co. had competed with United Engineers for control before dropping out earlier this month, is worth S$1.19 billion ($954 million) based on the new bid. United Engineers’ offer fell short of a S$4.56 to S$5.30 per share value assessed by KPMG Corporate Finance Pte., a financial adviser to WBL’s independent directors.

“Shareholders still expect UE to raise their bid,” said Lee Syn Yi, a Singapore-based analyst at CIMB-GK Securities Pte. “UE is serious about getting control. Maybe the area of S$4.40 could be the threshold for them.”

WBL gained 2.2 percent to S$4.23 as of 2:48 p.m. United Engineers fell 1.3 percent to S$3.11, while Straits Trading lost

0.3 percent to S$3.91.

Straits Trading, a tin-smelting company, in February offered 1.05 new shares or a cash payment of S$3.36 for every WBL share, according to a circular to shareholders. The company said on March 3 that its offer hadn’t become unconditional and had lapsed as it didn’t get at least 50 percent of WBL. Straits Trading holds 44.5 percent of WBL.

Bugatti Dealerships

“As the situation stands currently there appears little reason for STC to accept,” Straits Trading’s Chairman Chew Gek Khim said in an e-mailed response to a Bloomberg query on whether the company will accept United Engineers’ offer. “It is premature for any shareholder of WBL to answer” that query.

Oversea-Chinese Banking Corp. and its partners, which are working with United Engineers, will lift their stake in WBL to

39.5 percent from 38.3 percent as the debt was converted into equity, according to yesterday’s statement. United Engineers will “explore opportunities to enhance value across the company’s diverse portfolio of businesses,” it said.

WBL’s businesses include real estate projects in five Chinese cities and Bugatti and Bentley dealerships in Singapore.

China Opportunities

United Engineers said the bid will help expand its property business and seek out opportunities in China, as well as the company’s automotive unit as a source of recurring income. The company’s shareholders approved the takeover bid at a meeting yesterday.

WBL generates almost half its revenue in China, where it develops residential and commercial property and sells Volvo cars, according to its 2012 annual report. The company also owns stakes in Multi-Fineline Electronix Inc. and MFS Technology Ltd., which make circuits for phones and laptops, and businesses that distribute automobile parts and provide engineering services.

“UE would need to buy over the stake held by Straits Trading to consolidate the business and carry out their plans for WBL,” said CIMB-GK’s Lee. “It might require a fairly high price for Straits Trading to let go of their stake. It depends on the price.”

Wearne Brothers Ltd., as WBL was previously known, was founded in 1906 by Charles and Theodore Wearne and sold nailed-together Model T Fords in Singapore, introduced the Rolls-Royce to Malaysia and started the first commercial air service between the two countries in 1937, according to its website. After it was shut down during World War II, the company entered industries from double-decker bus services to computer design.

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