United Engineers (UE), which earlier announced a pre‐conditional offer for WBL Corporation at $4 a share, will be making a mandatory offer for WBL Corporation at a higher price of $4.15, even as rival Straits Trading Company chose to let its offer lapse.

The revised offer from UE increases the total value of UE's bid from $687million to $713million. UE, which has a market capitalisation of $960.3 million, said that it has entered into a term loan agreement with OCBC to partially finance the acquisition. The remaining costs will be funded through internal resources and the issuance of medium‐term notes.

Despite the better offer, UE will nonetheless still have a huge hurdle to overcome in the form of STC  ‐ the largest shareholder of WBL  ‐ before it can gain full control of the technology, property and luxury car distribution group. STC executive chairman Chew Gek Khim had said that "there appears little reason" to accept UE's offer, and that STC hopes to work with all shareholders of WBL to "realise and enhance value" subject to the outcome of the UE offer.

UE, a construction, property and engineering group, had made the offer as part of a transformational growth strategy. UE said that it will gain a steady stream of recurring earnings from WBL's car segment, and can tap on WBL's significant China property portfolio.

Source: AmFraser