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Merger of 2 United Engineers subsidiaries awaits parent's OK to proceed

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According to Market Intelligence, December 2022

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Merger of 2 United Engineers subsidiaries awaits parent's OK to proceed

UE Centennial Venture Pte. Ltd. indicated that it is planning to make a voluntary unconditional S$2.07-per-share offer for all the issued ordinary stock units that it does not already own in the share capital of fellow United Engineers Ltd. subsidiary WBL Corp. Ltd., subject to their parent company's approval.

According to a news release, UE Centennial will formally submit the offer once shareholders of United Engineers green light the plan. UE Centennial said that once the offer has been formally submitted, it has no intention of increasing the value of its bid.

As of Dec. 14, WBL has approximately S$499.5 million in issued and paid-up share capital made up of 281,200,630 shares. UE Centennial holds a 67.59% stake, or 190,056,316 shares, in WBL Corp., making it the target's controlling shareholder.

The merger of the two subsidiaries was first signaled when Yanlord Perennial Investment (Singapore) Pte. Ltd. made an offer of S$2.60 per share in July for all the shares it does not own in United Engineers. Back then, the consortium — Yanlord Land Group Ltd., Perennial Real Estate Holdings Ltd. and Heng Yue Holdings Ltd. — was given the option to increase by 19.9% its 10% stake in WBL Corp. for S$2.07 per share, conditional upon the closing of its offer for United Engineers.

Because the consortium's offer lapsed Sept. 19, with it holding about 97.51% of United Engineers' total preference shares and roughly 33.59% of United Engineers' total ordinary shares, Yanlord Perennial Investment is now obliged to purchase the additional 19.9% stake in WBL Corp. at the price of S$2.07 per share.

Once the stake buy is executed, Yanlord Perennial Investment will own about 92.25% of the shares being considered in UE Centennial's offer.

As of Dec. 14, US$1 was equivalent to S$1.35.