United Engineer bids for WBL Corporation

Here's why it's so keen on winning it.

In a release, United Engineers Limited has announced its intention to launch a takeover for WBL Corporation Limited in an all-cash pre-conditional voluntary general offer (the Offer) that values WBL at close to $1.1 billion.

Here’s more:

The Offer by UE’s subsidiary, UE Centennial Venture Pte Ltd (the Offeror), is for the remaining 61.7% of WBL, or 167.6 million shares, and all outstanding convertible bonds in WBL, that the Offeror and its concert parties do not own.

The concert parties comprising the OCBC Bank Group, the Great Eastern Group, the Lee Group, and directors of the Offeror, own a combined 38.3% stake in WBL.

The Offer price at $4.00 per share is at a 19.0% premium to a competing cash offer (adjusted for dividend). It represents a 14.0%, 13.3% and 12.0% premium to the last transacted price on 23 November 2012, 1-month volume weighted average price (VWAP) and 3-month VWAP up to 23 November 2012, respectively.

The Offer, being a major transaction under Chapter 10 of the SGX-ST’s Listing Manual, is subject to UE shareholders’ approval at an extraordinary general meeting to be convened on or before 31 May 2013.

UE said the rationale for the Offer is as follows: to expand and diversify the UE Group’s development and investment property gain exposure to longer-term growth in PRC’s real estate market harness synergies, particularly between properties, construction, and engineering businesses add additional growth engine via WBL’s automotive business, which is a source of recurring income explore opportunities to enhance value across the WBL’s diverse portfolio of businesses.

Jackson Yap, Group Managing Director & CEO of UE, said: “UE has been exploring opportunities to make a substantial acquisition that will be transformational in nature. We believe that WBL will give us the scale and scope, as well as the geographic diversification, to achieve our strategic ambition.

“UE and WBL have a long history of partnership and cooperation. We understand their business and know their people. The support from our concert parties for the Offer demonstrates their confidence in our track record of executing and building businesses.

“For WBL shareholders, our Offer provides a better alternative at a 19.0% premium to a competing cash bid.” Offer is subject to the Offeror receiving valid acceptances which will result in the Offeror and its concert parties owning stock units that carry more than 50% of WBL’s voting rights.

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