United Engineers   

United Engineers

You cannot do a GO again within next 12mths after your last GO lapse/failed which is tmr. 6 mths if you own more than 50%.

SGX Take Over code
Failed Bids
A take-over offer is unsuccessful if the offer does not become unconditional in all
respects. In such a case, the Take-over Code provides that except with the consent of
the SIC, where an offer other than a partial offer does not become unconditional in all
respects, the offerer and its concert parties may not, within 12 months from the date on
which such offer is withdrawn or lapses, either make an offer for the target company or
acquire shares in the target company if the offerer or its concert parties would thereby
become obliged to make a mandatory offer for the target.
Except with the consent of the SIC, where the offerer and its concert parties hold more
than 50 percent of the target company following an offer other than a partial offer, the
offerer cannot make a second offer for the target company or acquire shares from any
shareholder of the target company at a price higher than the offer price within six months
of the close of the first offer
 

TigTig      ( Date: 26-Aug-2017 10:48) Posted: Mulled over this and went through UE' s financials to try to get a sense of what WBL' s value in UE' s books.     Supposing the game plan is to dispose WBL, the distribution in dividends to existing shareholders will be that value, assuming they can sell off the whole 70% unquoted shares in WBL at one go.  Supposing the game plan is not to dispose WBL, but to break up UE immediately, sell off the core properties to a company of their choice, then all these raiders need is the Oxley 13%? plus another 3 % from the market.   Once they obtain 51%, they stop.     Basing on the scenarios above, UE' s share price could sprint upwards until the Oxley sale to the raiders is confirmed or when the latter obtain 3%.   The real winner will be Ching who may ask for a higher price per UE share and the raiders will still pay to get that 51% for them to cut UE up.     Possibly it will be at $3.60 to $4.00 even as the raiders can immediately gain control of UE without the hassle of putting up a second offer for shareholders.     Or alternatively, the raiders can do both, make an offer to Ching at, and put up a second offer to shareholders.   If the raiders just want 16%, the price may not be attractive, coz if they offer a high price, say $3.60, they may end up with more UE shares than they want to keep, ie if their gameplan is to secure just 51%.  As I read the past news articles, it' s ironical that UE did this to WBL by disposing the Automotives piece when they tookover the co in the past, so it looks like what they did in the past is coming back to haunt them.  Chances are UE share price should go up in next few trading days but the window is rapidly closing.   Who knows if Ching already has 16%, and if so, it' s gameover.     Once the raiders touch 51%, there is a possibility UE price could deflate.     But another scenario could be that Ching wants the 51%, however, most feel this is unlikely, and looking at the assets, it may be so as Yanlord likely will not give up their shares without a high premium.   Buying from the market will just lead to a bidding war.  If the scenario plays out, the best thing to do is sell into strength.     Oxley' s the real winner, so likelihood the share price will get a boost when Ching sells his parcel to Yanlord.   nooovva      ( Date: 26-Aug-2017 01:12) Posted: This is the most insightful and probably true analysis on how the deal was structured! Good job!

 

The real show starts tomorrow

 

This saga has taken many turns since 3 years ago. It has become more colorful and interesting and allowed me to gain insight from all contributors here about how the corporate players/raiders mechanism works. Let' s bring in the KKR, the Malaysian team, the Indonesian team and also possibly more Chinese team.
Let' s all sing " The more we are together, together.........." . I really hope to see sparks and fireworks.
 

 

Mulled over this and went through UE' s financials to try to get a sense of what WBL' s value in UE' s books.     Supposing the game plan is to dispose WBL, the distribution in dividends to existing shareholders will be that value, assuming they can sell off the whole 70% unquoted shares in WBL at one go. 
Supposing the game plan is not to dispose WBL, but to break up UE immediately, sell off the core properties to a company of their choice, then all these raiders need is the Oxley 13%? plus another 3 % from the market.   Once they obtain 51%, they stop.    
Basing on the scenarios above, UE' s share price could sprint upwards until the Oxley sale to the raiders is confirmed or when the latter obtain 3%.   The real winner will be Ching who may ask for a higher price per UE share and the raiders will still pay to get that 51% for them to cut UE up.     Possibly it will be at $3.60 to $4.00 even as the raiders can immediately gain control of UE without the hassle of putting up a second offer for shareholders.     Or alternatively, the raiders can do both, make an offer to Ching at, and put up a second offer to shareholders.   If the raiders just want 16%, the price may not be attractive, coz if they offer a high price, say $3.60, they may end up with more UE shares than they want to keep, ie if their gameplan is to secure just 51%. 
As I read the past news articles, it' s ironical that UE did this to WBL by disposing the Automotives piece when they tookover the co in the past, so it looks like what they did in the past is coming back to haunt them. 
Chances are UE share price should go up in next few trading days but the window is rapidly closing.   Who knows if Ching already has 16%, and if so, it' s gameover.     Once the raiders touch 51%, there is a possibility UE price could deflate.    

But another scenario could be that Ching wants the 51%, however, most feel this is unlikely, and looking at the assets, it may be so as Yanlord likely will not give up their shares without a high premium.   Buying from the market will just lead to a bidding war. 

If the scenario plays out, the best thing to do is sell into strength.     Oxley' s the real winner, so likelihood the share price will get a boost when Ching sells his parcel to Yanlord.
 

nooovva      ( Date: 26-Aug-2017 01:12) Posted: This is the most insightful and probably true analysis on how the deal was structured! Good job!   smalliinv      ( Date: 25-Aug-2017 15:50) Posted: This is my theory and humble opinion. ​ People assume that YL/P buying UE at $2.6 but they are actually buying at $3.6+ ​ YL/P is purchasing separate $2.07 WBL Stake for 30%. But actually they are buying 53.5% WBL stake. ​ The additional 23.5% is from OCBC' s UE' s 70% ownership of WBL. ​ OCBC 33.5% of UE 70% WBL stake = 23.5% WBL equivalent. ​ If full value of WBL is priced into UE - YL/P cannot afford and not worth it - as they are interested in the property asset of UE and not WBL. Financing something they do not need and intend to dispose is just not good business. ​ OCBC as a seller only need to concern about getting full value. So the plan is for YL/P to over pay for what they have in WBL and place the UE at a price they can accept in case they have full acquisiton. (Back of the envelop calculation) if you calculate 53.5% stake at 2.07 instead of 30%, the price is actually $1.16 per WBL share. ​ ​ YL/P is actually buying the UE shares at $2.6+$1.16 = $3.6+ YL/P offer of $2.6 to the public is without the WBL premium. I guess this is what Oxley is seeing as well and there is potentially a $1+ upside for them from $2.7 price they buying. OCBC is out with with full value realized and this deal for YL/P will fund for itself. Imagine first order of day for the new board by YL/P is to sell WBL and pay special dividend. They will have cash to come back again for privatisation later. ​ Where does this leaves with small investors like us - I would say stay put if you are long term investor. Wait for WBL disposal and special dividend. This may take some time. ​ In the short term, because of Oxley opportunist ventures, YL/P may not get the 50% and thus no obligation to buy the additional WBL shares from OCBC. This will create problems for YL/P because they do not have 100% WBL to sell and OCBC cannot divest the remaining stake. This will just create a lot of short term mess for everyone. There is chance that YL/P may sweeten the deal by few more cents and try get Oxley to the table and let them make a quick buck. But I think this is less than 50/50 chance.

 

This is the most insightful and probably true analysis on how the deal was structured! Good job!

 

smalliinv      ( Date: 25-Aug-2017 15:50) Posted: This is my theory and humble opinion. ​ People assume that YL/P buying UE at $2.6 but they are actually buying at $3.6+ ​ YL/P is purchasing separate $2.07 WBL Stake for 30%. But actually they are buying 53.5% WBL stake. ​ The additional 23.5% is from OCBC' s UE' s 70% ownership of WBL. ​ OCBC 33.5% of UE 70% WBL stake = 23.5% WBL equivalent. ​ If full value of WBL is priced into UE - YL/P cannot afford and not worth it - as they are interested in the property asset of UE and not WBL. Financing something they do not need and intend to dispose is just not good business. ​ OCBC as a seller only need to concern about getting full value. So the plan is for YL/P to over pay for what they have in WBL and place the UE at a price they can accept in case they have full acquisiton. (Back of the envelop calculation) if you calculate 53.5% stake at 2.07 instead of 30%, the price is actually $1.16 per WBL share. ​ ​ YL/P is actually buying the UE shares at $2.6+$1.16 = $3.6+ YL/P offer of $2.6 to the public is without the WBL premium. I guess this is what Oxley is seeing as well and there is potentially a $1+ upside for them from $2.7 price they buying. OCBC is out with with full value realized and this deal for YL/P will fund for itself. Imagine first order of day for the new board by YL/P is to sell WBL and pay special dividend. They will have cash to come back again for privatisation later. ​ Where does this leaves with small investors like us - I would say stay put if you are long term investor. Wait for WBL disposal and special dividend. This may take some time. ​ In the short term, because of Oxley opportunist ventures, YL/P may not get the 50% and thus no obligation to buy the additional WBL shares from OCBC. This will create problems for YL/P because they do not have 100% WBL to sell and OCBC cannot divest the remaining stake. This will just create a lot of short term mess for everyone. There is chance that YL/P may sweeten the deal by few more cents and try get Oxley to the table and let them make a quick buck. But I think this is less than 50/50 chance.

 

Of course, the most damaging would be to cut UE up, sell the core properties either to their own companies or another company set up for this purpose at market prices, and redevelop them.     Leaving UE with the assets that are leftovers. 

TigTig      ( Date: 26-Aug-2017 00:36) Posted: Your theory makes sense.   For them to dispose of WBL may not be an easy task as the shares are not quoted.   They could also sell off WBL assets piecemeal, turning the company into a shell, though that would be quite tough to get a good price and would also be time consuming. Hence the special dividend may not even be good or worth waiting for.       But if they can do something to enhance the UE properties, possibly there could be better returns for those shareholders who hang on to their UE shares.   Likely they' d use UE to borrow to the hilt to redevelop the properties.         smalliinv      ( Date: 25-Aug-2017 15:50) Posted: This is my theory and humble opinion. ​ People assume that YL/P buying UE at $2.6 but they are actually buying at $3.6+ ​ YL/P is purchasing separate $2.07 WBL Stake for 30%. But actually they are buying 53.5% WBL stake. ​ The additional 23.5% is from OCBC' s UE' s 70% ownership of WBL. ​ OCBC 33.5% of UE 70% WBL stake = 23.5% WBL equivalent. ​ If full value of WBL is priced into UE - YL/P cannot afford and not worth it - as they are interested in the property asset of UE and not WBL. Financing something they do not need and intend to dispose is just not good business. ​ OCBC as a seller only need to concern about getting full value. So the plan is for YL/P to over pay for what they have in WBL and place the UE at a price they can accept in case they have full acquisiton. (Back of the envelop calculation) if you calculate 53.5% stake at 2.07 instead of 30%, the price is actually $1.16 per WBL share. ​ ​ YL/P is actually buying the UE shares at $2.6+$1.16 = $3.6+ YL/P offer of $2.6 to the public is without the WBL premium. I guess this is what Oxley is seeing as well and there is potentially a $1+ upside for them from $2.7 price they buying. OCBC is out with with full value realized and this deal for YL/P will fund for itself. Imagine first order of day for the new board by YL/P is to sell WBL and pay special dividend. They will have cash to come back again for privatisation later. ​ Where does this leaves with small investors like us - I would say stay put if you are long term investor. Wait for WBL disposal and special dividend. This may take some time. ​ In the short term, because of Oxley opportunist ventures, YL/P may not get the 50% and thus no obligation to buy the additional WBL shares from OCBC. This will create problems for YL/P because they do not have 100% WBL to sell and OCBC cannot divest the remaining stake. This will just create a lot of short term mess for everyone. There is chance that YL/P may sweeten the deal by few more cents and try get Oxley to the table and let them make a quick buck. But I think this is less than 50/50 chance.

 

Your theory makes sense.   For them to dispose of WBL may not be an easy task as the shares are not quoted.   They could also sell off WBL assets piecemeal, turning the company into a shell, though that would be quite tough to get a good price and would also be time consuming. Hence the special dividend may not even be good or worth waiting for.      
But if they can do something to enhance the UE properties, possibly there could be better returns for those shareholders who hang on to their UE shares.   Likely they' d use UE to borrow to the hilt to redevelop the properties.      
 

smalliinv      ( Date: 25-Aug-2017 15:50) Posted: This is my theory and humble opinion. ​ People assume that YL/P buying UE at $2.6 but they are actually buying at $3.6+ ​ YL/P is purchasing separate $2.07 WBL Stake for 30%. But actually they are buying 53.5% WBL stake. ​ The additional 23.5% is from OCBC' s UE' s 70% ownership of WBL. ​ OCBC 33.5% of UE 70% WBL stake = 23.5% WBL equivalent. ​ If full value of WBL is priced into UE - YL/P cannot afford and not worth it - as they are interested in the property asset of UE and not WBL. Financing something they do not need and intend to dispose is just not good business. ​ OCBC as a seller only need to concern about getting full value. So the plan is for YL/P to over pay for what they have in WBL and place the UE at a price they can accept in case they have full acquisiton. (Back of the envelop calculation) if you calculate 53.5% stake at 2.07 instead of 30%, the price is actually $1.16 per WBL share. ​ ​ YL/P is actually buying the UE shares at $2.6+$1.16 = $3.6+ YL/P offer of $2.6 to the public is without the WBL premium. I guess this is what Oxley is seeing as well and there is potentially a $1+ upside for them from $2.7 price they buying. OCBC is out with with full value realized and this deal for YL/P will fund for itself. Imagine first order of day for the new board by YL/P is to sell WBL and pay special dividend. They will have cash to come back again for privatisation later. ​ Where does this leaves with small investors like us - I would say stay put if you are long term investor. Wait for WBL disposal and special dividend. This may take some time. ​ In the short term, because of Oxley opportunist ventures, YL/P may not get the 50% and thus no obligation to buy the additional WBL shares from OCBC. This will create problems for YL/P because they do not have 100% WBL to sell and OCBC cannot divest the remaining stake. This will just create a lot of short term mess for everyone. There is chance that YL/P may sweeten the deal by few more cents and try get Oxley to the table and let them make a quick buck. But I think this is less than 50/50 chance.

 

It has been a super long episode that I hope there is a Manchester to come along and just made it Manchester United Engineer.

 

2.71 gone just like that. doesn' t seem like value investing to me

 

This is my theory and humble opinion.

​ People assume that YL/P buying UE at $2.6 but they are actually buying at $3.6+
​ YL/P is purchasing separate $2.07 WBL Stake for 30%. But actually they are buying 53.5% WBL stake.
​ The additional 23.5% is from OCBC' s UE' s 70% ownership of WBL.
​ OCBC 33.5% of UE 70% WBL stake = 23.5% WBL equivalent.

​ If full value of WBL is priced into UE - YL/P cannot afford and not worth it - as they are interested in the property asset of UE and not WBL. Financing something they do not need and intend to dispose is just not good business.

​ OCBC as a seller only need to concern about getting full value. So the plan is for YL/P to over pay for what they have in WBL and place the UE at a price they can accept in case they have full acquisiton.

(Back of the envelop calculation) if you calculate 53.5% stake at 2.07 instead of 30%, the price is actually $1.16 per WBL share.
​
​ YL/P is actually buying the UE shares at $2.6+$1.16 = $3.6+

YL/P offer of $2.6 to the public is without the WBL premium. I guess this is what Oxley is seeing as well and there is potentially a $1+ upside for them from $2.7 price they buying.

OCBC is out with with full value realized and this deal for YL/P will fund for itself. Imagine first order of day for the new board by YL/P is to sell WBL and pay special dividend. They will have cash to come back again for privatisation later.

​ Where does this leaves with small investors like us - I would say stay put if you are long term investor. Wait for WBL disposal and special dividend. This may take some time.

​ In the short term, because of Oxley opportunist ventures, YL/P may not get the 50% and thus no obligation to buy the additional WBL shares from OCBC. This will create problems for YL/P because they do not have 100% WBL to sell and OCBC cannot divest the remaining stake. This will just create a lot of short term mess for everyone. There is chance that YL/P may sweeten the deal by few more cents and try get Oxley to the table and let them make a quick buck. But I think this is less than 50/50 chance.

 
 



 

 

A sharing/gentle reminder on UE fundamentals EPS ($) 0.22818. It not rocket science to understand. (http://unitedengineers.listedcompany.com/stock_fundamentals.html)
PE 11.833
It is calculated by dividing the current market price of the stock by its earning per share (EPS). It shows the sum of money you are ready to pay for each dollar worth of the earnings of the company. Layman: Wu hua boh.. Smaller better..
NAV $3.0165
Net asset value (NAV) is the value of an entity' s assets minus the value of its liabilities. Layman: You today sell EVERYTHING you own, pay EVERY DEBT. The balance share with all issued/paiedup shares. Thats the figure.

Some other brokering A grade
Capitalland Commercial Trust PE 20.199 / NAV 1.7964 (Today open 1.71) 
http://cct-trust.listedcompany.com/stock_fundamentals.html
Singtel PE 15.61 / NAV 1.73 (Today open 3.74) 
https://www.singtel.com/about-Us/investor-relations/financial-summary
SPH PE 16.92 / NAV 2.18 (Today open 2.80) 
http://sph.listedcompany.com/financial_ratios.html

Others   UE BizHub CITY @ Clemenceau Avenue, Singapore,  Group&rsquo s effective interest:  100%,  Held by:  United Engineers Limited, etc..
https://uel.sg/services/Property/Property_projects.html

GO @ 2.60???   Might as well say you don' t wish the deal to go through




 

 

Best comment so far, here in this thread.

 

smalliinv      ( Date: 25-Aug-2017 11:18) Posted: Unlikely consortium will get 50% with current price higher than offer price. OCBC well laid plan in danger as the other 19% WBL will only trigger when YL/P acquire more than 50%. ​ I still think the value of UE is to break it up and sell WBL. In the long run, UE shareholder should expect value and special dividend when that happens (but could be 1 year down the road) - this is what I think Oxley strategy too. I dont think they are here for the bidding war which will be costly and not worth the low returns. ​ In short term, after expiration, interesting to see if YL/P willing to up the price. I think they are very happy to keep UE listed but they do not have enough % in shares to have majority to push their agenda (strip and sell off UE assets - WBL).

 

Unlikely consortium will get 50% with current price higher than offer price. OCBC well laid plan in danger as the other 19% WBL will only trigger when YL/P acquire more than 50%.

​ I still think the value of UE is to break it up and sell WBL. In the long run, UE shareholder should expect value and special dividend when that happens (but could be 1 year down the road) - this is what I think Oxley strategy too. I dont think they are here for the bidding war which will be costly and not worth the low returns.

​ In short term, after expiration, interesting to see if YL/P willing to up the price. I think they are very happy to keep UE listed but they do not have enough % in shares to have majority to push their agenda (strip and sell off UE assets - WBL).

 

 

?ç?ÕåU?´

 

by the look of it, a bidding war will be most likely
for the fun of it, what is your predicted offer price

 

Preference shares do not have voting rights

nooovva      ( Date: 24-Aug-2017 22:25) Posted: Kirana: it means perennial has acquired 90.7% of Preference Shares. Under Companies Act, after crossing 90%, preference shareholders can get perennial to acquire their preference shares if they still continue to hold them.

 

Theoritically it is possible to go below $2.60 after offer ends. But in reality based on prevailing situation (the pref shares matter is separate   n somehow ord shareholders should question why bring-out such thing now) just ask yourself if you are running Oxley ....... what will you do if UE slide below $2.60 then? And YL/P consortium?
Will either (or both parties) party tussle to buy more? Or you think the show just end when the offer end?

nea03177      ( Date: 24-Aug-2017 19:58) Posted: Why say possible to go below $2.60 after offer ends luncheonmeat      ( Date: 24-Aug-2017 19:50) Posted: simi fear

 

Watch the opening today.

Important announcement by UOB on behalf of offeror.

kirana      ( Date: 25-Aug-2017 06:43) Posted: Preference share power over ordinary share? Oxley crossed 11% means the offerer less than 89%! Plus you and I walking in the streets.

 

Preference share power over ordinary share?
Oxley crossed 11% means the offerer less than 89%! Plus you and I walking in the streets.

 

It' s unlikely the ordinary shares will cross 90% as the market price is above the offer price and Oxley has been mopping up.