United Engineers Raises Offer in Final Bid for Jaguar Dealer WBLSanat Vallikappen
United Engineers Ltd. made a final bid of S$4.50 a share for WBL Corp., raising it by 8.4 percent a month after a financial adviser to the Singapore-based car distributor said the previous offer wasn’t fair.
The revised bid values WBL, which owns the Jaguar and Bugatti dealerships, at S$1.25 billion ($1 billion), according to Bloomberg calculations. United Engineers, which had offered to pay S$4.15 a share in cash on March 12, said it won’t be extending after the latest closing date of May 29.
The company is bidding for WBL because the “recurring income” from the luxury-car dealerships would counter the choppiness from real estate and construction, which are driven by the timing of contracts, United Engineers Chief Executive Officer Jackson Yap said in an interview in March.
The latest bid “demonstrates our seriousness to bring our offer to a successful close,” Yap said in a statement to the stock exchange today.
KPMG Corporate Finance Pte, a financial adviser to WBL’s independent directors, said on April 10 that United Engineer’s S$4.15-a-share offer is “not fair,” based on a review of the financial terms.
WBL has dealerships in six Asian markets, where it sells Volvos in China, Bentleys in Indonesia, and Bugattis in Singapore, according its website.
United Engineers, founded in 1912 as an engineering company that helped build Singapore’s historic supreme court and Shangri-La hotel, has been scouting for businesses to broaden its revenue sources, Yap said. Its 2012 net income dropped to S$72 million from S$269 million a year ago, when it completed the sale of its properties in the city.
The property development unit contributed almost nothing to its revenue in 2012, compared with about 65 percent previously, the company said earlier this year.
Straits Trading Co. increased its stake in WBL to 40 percent after buying stock from two shareholders, emerging as the biggest investor. It made a S$3.41-a-share offer for WBL, prompting United Engineers’s bid at the end of January at S$4 a share. The bid from Straits Trading, a 126-year-old Singapore conglomerate that mines for tin and develops property, has since lapsed.
WBL has property projects in five Chinese cities and also sells Bentley and Jaguar vehicles in the city-state.