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Mandatory Conditional Cash Offer
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katak88
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15-Jan-2009 21:51
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Business Times - 15 Jan 2009
Gokongwei factor lurks as UOL bids for UIC Filipino tycoon's stance may influence fate of takeover offer By UMA SHANKARI (SINGAPORE) Wee Cho Yaw's UOL Group has made a $1.15 billion offer for all shares it does not own in United Industrial Corp (UIC). The offer - for $1.20 a share - values UIC at around $1.65 billion. UOL might also make an offer for UIC-controlled Singapore Land in the future, it said. UOL made the mandatory cash offer after the stake in UIC held by the group and its related parties crossed the 30 per cent mark to 30.2 per cent. The offer price is 9.1 per cent higher than UIC's last transacted price of $1.10 per share on Tuesday, Jan 13 - but some 51.6 per cent lower than UIC's net asset value per share of $2.48 as at Sept 30, 2008. The offer is conditional upon the offerer and parties acting in concert with it holding more than 50 per cent of voting rights in UIC at the offer's close. UOL's offer for UIC may also lead to a mandatory takeover offer for SingLand if UOL gains control of more than 50 per cent of UIC. UIC owns about 72 per cent of SingLand. If that happens, UOL will make an offer of $3.57 for each SingLand share, it said. The offer price is based on the simple average of the daily volume weighted average traded prices of SingLand shares for the latest 20 trading days prior to yesterday's announcement. UOL's takeover bid comes about three years after Filipino tycoon John Gokongwei made a takeover offer for UIC after his shareholding in the company crossed the 30 per cent mark. The October 2005 bid failed, but Mr Gokongwei now holds a deemed stake of 35.1 per cent in UIC and his JG Summit Holdings is the single largest individual shareholder in the company. UOL said that the offer represents an opportunity to 'better align the strategic objectives' of UIC and UOL. UOL and UIC have joint investments in retail commercial and hotel projects. In addition, the two companies are jointly developing residential projects in Singapore. Said UOL: 'If UOL is able to obtain a majority shareholding in UIC, the UOL Group will be able to streamline the interests of both groups in these co-investments.' JG Summit , which is listed on the Philippine Stock Exchange, has declined to comment on UOL's bid. BT understands that the company has yet to evaluate the offer and the implications to its overseas expansion plans. JG Summit is also cash rich. As at September 30, 2008, JG Summit had cash and cash equivalents of 7.9 billion Philippine pesos (S$247.5 million). In addition, there have been no signs that the company is looking to dispose of its shareholdings, either in the Philippines or abroad. Instead, JG Summit is in the market for fresh acquisitions and new business ventures, BT understands. Analysts said that JG Summit and other shareholders are unlikely to sell their stakes in UIC as the offer price is not attractive enough. Insider buying of UIC by Mr Gokongwei and other major shareholders has been very consistent throughout the last two years, said CIMB analyst Donald Chua. 'We do not expect them to sell their stakes at these valuations.' Long-term shareholders, he said, might be better off holding onto their shares and waiting for the next property upcycle. JPMorgan analyst Christopher Gee similarly noted that the last takeover of a major property company in Singapore - CapitaLand's bid for Ascott Group in January 2008 - was done at a premium of 43 per cent to the last traded price. CapitaLand succeeded in taking Ascott private. While market conditions then were quite different compared to today, early 2008 was not at the peak of the property upcycle either, said Mr Gee. Analysts here said that Mr Gokongwei is unlikely to make a counter-offer for UIC as not many shareholders are likely to sell their shares to UOL - which means that Mr Gokongwei has no incentive to make a counter-bid to prevent UOL from gaining control of UIC. But as one analyst put it: 'All this is just speculation at this point.' And while UOL might not be able to get a large chunk of UIC shares with its offer, it could increase its stake in UIC and SingLand at a good price if some shareholders choose to exit their investments in the midst of a property downturn. UIC also suffers from poor liquidity as more than 65 per cent of its stock is held by UOL and Mr Gokongwei. The trading liquidity of UIC shares has been low, with an average daily trading volume of about 580,000 shares over the last 12 months - which represents just 0.04 per cent of the total issued shares. All three stocks - UOL, UIC and SingLand - were suspended from trading yesterday. Trading resumes today. |
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katak88
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15-Jan-2009 21:45
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Business Times - 15 Jan 2009
Wee's timing may stymie Gokongwei By SIOW LI SEN VETERAN banker Wee Cho Yaw yesterday launched 2009's first local corporate takeover bid and, in doing so, provided much excitement to an otherwise dull market. The gossip mill went into overdrive as market observers vied to give their two cents' worth on Mr Wee's $1.55 billion takeover offer for United Industrial Corp (UIC) and its unit Singapore Land by the UOL group. His fans pointed to Mr Wee's perfect or lucky timing in managing to put in the offer at a low price of $1.20 per share while his rival John Gokongwei Jr is stuck at a whopping $2.85 a share. This means the Filipino tycoon has to fork out almost $3 billion if he intends to mount a competitive bid. Takeover rules dictate that the offer has to be at the highest price that has been paid by a bidder in the last six months. The highest price Mr Gokongwei paid for UIC in the last six months was on Aug 14 last year, when he bought 48,000 shares at $2.85 a piece. Mr Wee, on the other hand, while being among the most active buyers in 2008, managed to pay not more than $1.20 a share during that six-month period. Mr Wee, 80, and Mr Gokongwei, 81, chairman and deputy chairman of UIC respectively, have been nipping at each other's heels for control of the property company for some 10 years now. The tussle for UIC and its prized asset SingLand, a major office landlord with some of the most valuable real estate in Raffles Place and Shenton Way, began in 1999 when Mr Gokongwei first bought into the company after he paid $310 million to take over a stake from Indonesian businessman Liem Sioe Liong. It was seen as a rude shock to Mr Wee who at the time controlled UIC through United Overseas Bank (UOB), which owned 23 per cent. Mr Wee is UOB chairman. Through JG Summit Holdings, Mr Gokongwei then continued buying UIC shares and now owns 34.8 per cent, ahead of UOL's 30.2 per cent. In late 2005, Mr Gokongwei made a failed $1.09 a share bid for UIC after he amassed 30 per cent - triggering a mandatory takeover bid. But it was never seen as a serious effort because the offer price was at a discount to its then last-traded price. With two major shareholders, considered as canny and shrewd as they come, and who probably match each other in sniffing out the best deals, UIC minorities who had hoped for a windfall from a takeover tussle have waited in vain. Mr Wee's latest move, while panned by some analysts as a 'technical offer' - not serious and likely to receive the same fate as the 2005 failed bid - is taking place in quite a different climate. The world is in a very bad recession and much wealth has been destroyed. Investment bankers on UOL's behalf rightly argue that the bid is sure money, not to be scorned in these uncertain times. Mr Wee, who some have accused of trying to get UIC on the cheap, is just doing what any buyer would do: pay as little as he can get away with. And if he doesn't succeed, he can then continue to amass more UIC shares - which some think is his game plan. UIC minorities are unlikely to see a competitive bid from Mr Gokongwei, who (while personally very wealthy) is not in the same league as Mr Wee, who is worth billions. Not that Mr Gokongwei is short of cash. He is said to have pocketed some $233 million for his almost 30 per cent share of Leedon Heights, which was sold for $835 million in 2007 to Guoco- Land. According to a Forbes ranking last October, Mr Gokongwei was worth US$680 million. Market capitalisation of JG Summit is S$430 million and it had a debt net of cash of S$2.6 billion as at end-September 2008. So what should UIC minorities do? They can always dream that a third party might jump into the fray though tight credit conditions will shrink the possible number of contenders. Or they can continue to hold on to UIC shares and ride out the recession. After all, Mr Wee's numerous fans have always done not too badly by hanging on to his coattails. In such times, they can take comfort in knowing that UIC is a valuable asset, albeit battered. |
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katak88
Senior |
15-Jan-2009 21:41
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Business Times - 15 Jan 2009
Gokongwei raises stake in UIC By SIOW LI SEN BIGGEST shareholder John Gokongwei Jr increased his stake in United Industrial Corp (UIC) which is under a takeover from rival Wee Cho Yaw on Tuesday in a filing on Thursday. Through Telegraph Developments, Mr Gokongwei bought 800,000 UIC shares on 13 January 2009 at an average $1.0844 a share, raising his stake to 35.156 per cent from 35.098 per cent. Yesterday, Mr Wee's United Overseas Land (UOL) launched a bid for UIC offering $1.20 a share. UOL owns 30.2 per cent of UIC. |
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katak88
Senior |
15-Jan-2009 21:32
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AK_Francis
Supreme |
15-Jan-2009 15:26
Yells: "Happy go lucky, cheers." |
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Yah, holders at Phi are rather reluctant to release their share. Stand sideline to watch the tug-of-war loh.
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shplayer
Elite |
15-Jan-2009 15:09
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The thing with GO is like this....once WCY has made a GO, he cannot buy a single share from the open market above 1.20. If he does, he will have to revise the offer price to the new, higher price. The fact that UIC today is trading above 1.20, despite the bearish sentiment in the market, implies: 1. Some investors are hoping that GKW may make a counter offer at a higher price. 2. WCY may, thru his proxies, try to keep the price above 1.20 so that those who want to liquidate will do so in the open market instead of accepting the GO offer. It is an accepted fact that both GKW and WCY want control of UIC......but both are very patient and are willing to play the waiting game. Perhaps the fact that GKW recently upped his stake to 35+% prompted WCY to cross the 30% trigger lest he falls too far behind. Whilst I still believe both of them want to try to avoid an expensive bidding war, nevertheless, this GO will put WCY on equal footing with GKW in the sense that the former can, after the lapse of the GO, increase his stake in UIC by not more than 1% per 6 months. |
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AK_Francis
Supreme |
15-Jan-2009 11:01
Yells: "Happy go lucky, cheers." |
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Noted. But still got people throwing at 1.24, who are they? May be profit taking, guesses.
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candle
Member |
15-Jan-2009 10:56
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Not every one is desperate to sell at such huge discount. So it will be a non event.
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AK_Francis
Supreme |
15-Jan-2009 09:33
Yells: "Happy go lucky, cheers." |
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1.25 now, is it worth buying? | ||
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ozone2002
Supreme |
15-Jan-2009 09:03
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crazy deal.. i won't sell if i were smart investor.. UIC NAV $2.48...u wanna buy @ $1+? cheap sale ah.. |
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jackjames
Elite |
15-Jan-2009 08:40
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He is a very very smart guy.. in fact, I don't even know UIC this counter , UOL I know a bit la.. because of Buana Vista project.. but then, he bought at such a dirt cheap price.. it was $3.5++ in Aug 07, and from January 2006 to November 2008, the price range is lingering from price 1.20 and above......... that means, those who bought UIC in year 2006, 2007, and 2008 (except Dec) are all in big loss.... oh dear, can't imagine those who bought at 3 ++ and hoping the next stock cycle to recover to breakeven, now the dream all shattered with only $1.20 ! damn... so, UOL price share will go up today meh? 1.6 billion, they are rich ....
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wongmx6
Veteran |
15-Jan-2009 06:44
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WCY is a Tiger, Offer of $1.2 is too low and unattractive at all. | ||
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goondoo
Member |
14-Jan-2009 18:09
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Thk both parties no intention to take it private, just want to gain control.
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katak88
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14-Jan-2009 18:07
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UOL makes S$1.20/share cash offer for UIC
By UMA SHANKARI UOL Group, a property firm controlled by United Overseas Bank chairman Wee Cho Yaw, on Wednesday made a cash offer for all shares it does not own in United Industrial Corp (UIC) at S$1.20 a share. The deal values UIC at around S$1.65 billion. UIC also controls another listed company, Singapore Land, which owns office and retail properties in Singapore. UOL made the mandatory conditional cash offer the stake in UIC held by UOL and related parties crossed the 30 per cent mark. The offer price is about 9.1 per cent higher than UIC's last transacted price of S$1.10 per share on the Singapore Exchange on Tuesday, January 13. All three stocks - UOL, UIC and SingLand - were suspended today ahead of the announcement. 'The offer represents an opportunity to better align the strategic objectives of the UIC Group with those of the UOL Group,' UOL said in a statement. 'This allows the UOL Group to increase its exposure to UIC Group's portfolio of quality property assets and to expand its core business.' The offer for UIC may also lead to a mandatory takeover offer for SingLand, UOL said. UIC owns about 72 per cent of SingLand. |
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TradeChancellor
Veteran |
14-Jan-2009 17:59
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I am thinking of a possible interpretation. WCY wants to compete with GKW to gain control of UIC and this is the best time to mop up as much due to low prices and also get close to GKW's 35%. However, by doing so, WCY has triggered the mandatory GO as he has bought more than 1% of issued capital within 6months. My interpretation is at this point, although he is a rival of GKW in controlling stake, he has no interntion of taking it private yet. As such, he is offering $1.20, way below the NAV so that it would likely be rejected. So my feel is that both parties wants to take it private but are waiting for an opportune time. Does that seem plausible? | ||
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goondoo
Member |
14-Jan-2009 17:43
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Why not accept the deal even if 50% below NAV? Now even big blue chips like DBS and KepLand are trading at dirt cheap valuations. Getting cash for UIC will give shareholders a chance to buy into other blue chips at current dirt cheap valuations. |
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TradeChancellor
Veteran |
14-Jan-2009 17:30
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Am I missing something? Why would shareholders accept $1.20, which is way below the NAV? | ||
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shplayer
Elite |
14-Jan-2009 17:08
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GO triggered by crossing the 30% mark. Conditional upon UOL securing >50% of UIC. Given that GKW has 35% and MS 12%.....and the price of 1.20 is about 50% of NAV (2.48), this is not a serious offer. Balance of share in smaller shareholders is about 22%. => >90% of 'smaller' shareholders must accept offer for it to be unconditional......which I doubt will happen. Unless GKW makes a counter offer, I think it is de javu. Depending on market condition, price may slip back to 1.00 to 1.10 after offer period expires. |
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katak88
Senior |
14-Jan-2009 14:34
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Mandatory Conditional Cash Offer United Overseas Bank Limited ("UOB"), DBS Bank Ltd ("DBS") and ANZ Singapore Limited ("ANZ") (collectively, the "Financial Advisers"), for and on behalf of UOL Equity Investments Pte Ltd ("UEI" or the "Offeror"), a wholly-owned subsidiary of UOL Group Limited ("UOL"), wish to announce that the Offeror has today agreed to acquire 15,862,000 ordinary shares ("Shares") in United Industrial Corporation Limited ("UIC") epresenting approximately 1.2% of the total issued Shares1 at a purchase price of S$1.20 per Share (the "Acquisition"). Following the Acquisition, and as at the date of this Announcement, the Offeror, together with the Relevant Parties (as defined in paragraph 11 of this Announcement), own, control or have agreed to acquire an aggregate of 415,612,600 Shares, representing approximately 30.2% of the total issued Shares. |
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