United Engineers

[a74henry]

OCBC is smart with bringing their non-core investments to a market value that is beneficial to its shareholders. No wonder OCBC shares increased sharply over the past years.

Plus, they keep them and reinvest in its core businesses. Definitely, a growth counter.

(vested)

[yanziyang]

Orchardgateway to open in second half of 2013

THE latest mall to hit Orchard Road will include, among its fashion labels, library@orchard and the Singapore Visitors Centre@Orchard, which is currently located at the junction of Cairnhill Road and Orchard Road.

The mall, which is part of the integrated development, orchardgateway, stretches from 277 Orchard Road to 218 Orchard Road (diagonally opposite), and comprises 180,000 square feet of leasable space over six floors (including two basement floors).

The mixed-development comprises a 20-storey hotel-retail development located next to Somerset MRT station and an 11-storey office-retail development, to be named orchardgateway@emerald.

The segment of the mall on 277 Orchard Road (the former Hotel Phoenix and Specialists' Centre site) is 150,000 sq ft, while the mall on 218 Orchard Road (the former Orchard Emerald site) is 30,000 sq ft.

Positioned as a fashion mall, it will house fashion, fashion-related, and lifestyle brands, as well as a range of food-and-beverage establishments.

The segment of the mall located at the former Orchard Emerald site will also house the 18,000 sq ft, lifestyle-oriented library@orchard in 2014.

BT had previously reported that the 500-room hotel will be managed by Shangri-La group, under its Traders brand.

This will be the second Traders hotel in Singapore, after the one at Cuscaden Road. Traders is the four-star brand of the Shangri- La Hotels and Resorts chain.

Both towers will be linked by a glass tubular overhead bridge and an underpass under Orchard Road.

Orchardgateway will also have direct access to the Somerset MRT station and house the remaining part of Discovery Walk, completing the F&B-cum-shopping corridor that stretches from 313@somerset to Orchard Central.

OCBC appointed United Engineers to develop the orchardgateway project in 2010, through an arrangement that allows the bank to retain ownership of the property after the redevelopment is completed.

Orchardgateway@emerald is being developed by OCBC's insurance arm, Great Eastern Life, and will include a double-storey conservation house at the edge of the adjacent Emerald Hill Historic District.

Orchardgateway is targeted to open in the second half of 2013. Savills Singapore has been appointed the marketing consultant for the mall and the office building.

Pre-opening commitment levels for the Orchard Gateway have been reported to achieve close to 80 per cent.

[yanziyang]

United Engineers (UE) has extended the deadline for WBL Corporation shareholders and convertible bondholders to accept their takeover offer to 5.30pm on 10 May. As at 23 Apr, UE controlled 39.64% of WBL.

[felixleong]

UE RAISES OFFER FOR WBL TO FINAL PRICE OF $4.50 FROM
$4.15 A SHARE

Revised price is at 28.2% premium to price before news of earlier offer in
November 2012

Price is final, no more increase to come

No extension after Final closing date of 29 May 2013; no extension even if offer
becomes unconditional

Shareholders and bondholders who have accepted offers entitled to higher price
SINGAPORE, 09 May 2013
– United Engineers Limited (UE) today revised the price
for its general offer for WBL Corporation Limited (WBL) to $4.50 a share from $4.15
previously, an increase of 35 cents a share.
UE, which is making its offers through its subsidiary, UE Centennial Venture
Pte. Ltd. (the Offeror), said the latest price is final and there will be no more increase.
The closing date of the offers has now been extended from 5.30 pm, 10 May
2013 to 5.30 pm, 29 May 2013. This is the final closing date and there will be no
more extension even if the share offer becomes unconditional as to acceptances on
or before 29 May 2013.
UE said shareholders who have earlier accepted the offer at the previous
price of $4.15 will be entitled to benefit from the higher offer price. Accordingly, no
further action is required to be taken by shareholders who have already accepted the
offer.
On 27 March 2013, UE launched mandatory general offers for WBL for the
60.46% of the stock units and all the outstanding convertible bonds that it and its
concert parties do not own.
The revised offer of $4.50 a share represents a premium of 8.4% over the last
transacted price of the shares on 8 May 2013 and a premium of 28.2% over the
“unaffected price”, that is the price on 23 November 2012 which is the last full trading
day before the announcement of an earlier bid which has since lapsed. The revised
price is also at a premium of 27.5% and 37.2% to the 1-month volume weighted
average price (VWAP), and 12-month VWAP up to 23 November 2012 respectively.
Page 2 of 3
WBL shares had never traded above the revised offer price of $4.50 in the 27
months prior to the unaffected date.
Jackson Yap, Group Managing Director & CEO of UE, said: “Our improved
offer represents a sweetened deal for WBL shareholders. In the context of the
reported second quarter performance of WBL, it demonstrates our seriousness to
bring our offer to a successful close. This is our final price and final closing date. We
urge all shareholders to consider the offer seriously.”
The higher UE offer is within the valuation of $4.27-$5.16 per share of WBL
provided by KPMG Corporate Finance, the Independent Financial Advisor, in its
latest report to the Independent Directors of WBL dated 9 April 2013.
As a consequence of the share offer price increase, the final convertible
bonds offer price has been revised to $1,962 in cash for every $1,000 in principal
amount of convertible bonds. Bondholders who have earlier accepted the convertible
bonds offer will be entitled to benefit from the higher price.
For the 12 months before the announcement of an earlier offer which has
since lapsed, WBL shares traded in the $3.25-$3.50 range for more than 50% of the
time, reaching a high of $3.78. If the UE offer is not successful, the market price of
WBL shares may fall back to pre-offer levels.
WBL’s trading liquidity has generally been thin with an average daily trading
volume of about 52,838 shares over the 12-month period prior to the unaffected date
of 23 November 2012. It represents about 0.02% of the issued share capital of WBL.
Liquidity may worsen after the close of the offers.
If the public float of WBL falls below the minimum threshold of 10%, the
Singapore Exchange may suspend the trading of WBL shares. UE has said it does
not intend to preserve the listing status of WBL in the event of a suspension.
The offers remain conditional upon the Offeror receiving acceptances which
result in the Offeror and its concert parties owning more than 50% of the issued
shares in WBL. If the offers are not successful, the Offeror and its concert parties
cannot make another offer for WBL within the next 12 months from the lapse of the
offers.
UE is advised by J.P. Morgan (S.E.A) Limited.
-End-

[yanziyang]

Straits Trading accepts UE offer for WBL in S$509m deal

By Conrad Maria Jayaraj

SINGAPORE — The Straits Trading Company (STC) has been enticed by United Engineers’ (UE) enhanced offer of S$4.50 a WBL share to part with its entire 44.6 per cent stake in the technology, property and car distribution company, ending a feverish battle for one of Singapore’s corporate icons.

STC said in a statement filed with the Singapore Exchange yesterday that it acted in the best interest of all stakeholders to accept UE’s offer, which including its stake in convertible bonds will result in gross proceeds of S$508.8 million. STC will book a total net gain of S$83.3 million on its stake sale.

The company said: “STC believes it is critical for the board and management of WBL to have commonality of goals and strategies for any value unlocking initiatives to be successful. This desire was recognised by two substantial stockholders of WBL,” referring to STC and UE.

For UE, the acquisition will allow it to expand and diversify its development and investment properties, gain exposure to the Chinese real estate market, harness synergies between its property, construction and engineering businesses and boost revenue via WBL’s automotive business.

STC had made a mandatory offer for WBL in January after an earlier share swap with fund managers Aberdeen Asset Management and Third Avenue resulted in its raising its stake in the company to 40.55 per cent. That offer — of S$3.41 per WBL share or a swap of 1.07 STC shares per WBL share — lapsed on March 1. UE, which together with its concert parties at that time owned 40.1 per cent of WBL, launched its initial offer for WBL in January at S$4 for each WBL share. It raised the price to S$4.15 on March 12, before announcing on May 9 its final offer of S$4.50 a share with an acceptance deadline of May 29.

Following STC’s acceptance, UE now holds 87.7 per cent of WBL, making its offer unconditional, UE Chief Executive Jackson Yap said, urging all other shareholders to accept the offer by the deadline.

http://www.todayonline.com/business/stra...s509m-deal

[yanziyang]

UE gains control of WBL Target S$2.87 (Long Term: Neutral)

1Q13 saw maiden contributions from UE BizHub East, but profits were driven down by higher expenses. STC's acceptance increased UE's share of WBL to 87.7%. We view the lack of synergy between UE and WBL as a key factor for the downgrade.

1Q13 core net profit came in lower, at 8% of our FY13 forecast and 11% of consensus, as we expect backend loaded earnings from Eight Riversuites. We cut FY13-15 EPS by 21-33% on lower margins and investment income. Downgrade to Neutral as target price falls based on a 45% disc. to RNAV (prev. 30%).

Results overview
1Q13 revenue rose 16.9% yoy but core net profit fell 52.4% yoy, as maiden contributions from UE Bizhub East and higher contributions from UE E&C were offset by higher administrative expenses and finance costs. There were no contributions from property development, as Austville EC will only be recognized upon completion in 2014 and we expect progressive sales from Eight Riversuites to be backend loaded.

S$4.50 per share for WBL
UE revised its offer for WBL on 9 May to S$4.50, from S$4.15. STC has since accepted the offer, raising UE's share of WBL to 87.7%. We expect minority shareholders to accept UE's offer before the it closes on 29 May, as the unconditional offer of S$4.50 is attractive at 15% premium to WBL's 3-yr average price. Our back-of-envelope calculations estimate an SOP of S$5.17/share for WBL. At the offer price of S$4.50, this could lift UE's RNAV by 58 Scts, or 11%. However, UE's net gearing will jump to 143% after acquisition, assuming the acquisition is fully debt-funded.

Key risks
We dislike the acquisition for 3 reasons: 1) lack of synergy between the businesses 2) high gearing prohibits future growth and 3) insufficient local expertise in China's property sector. Downgrade to Neutral, as we now peg a higher discount (45%) to UE's RNAV on diverse business segments. The stock trades at 0.7x P/BV, ahead of its 5-yr historical average.

Source: CIMB Daybreak - 16 May 2013

---

Hit by start-up expenses Target price: SGD4.05

Expect share price weakness from WBL takeover. 1Q13 results were slightly below our expectations, but largely a misdemeanor given UE’s ongoing plans to takeover WBL. With the recent WBL saga between Straits Trading and UE drawing to a close, we think UE will experience short term share price weakness via paying over 12% higher than their original price of SGD4/share for WBL. We have not factored in WBL’s impact on UE, and remain largely optimistic on UE’s outlook going forward with the inclusion of this conglomerate. Maintain BUY with a TP of SGD4.05/share.

Slightly below expectations. 1Q13 results were slightly below expectations, with higher staff and operating costs arising from the commencement of UE Bizhub East and Park Avenue Changi. Revenue was at SGD136.6m (17% YoY, -25% QoQ), and net profit at SGD7.4m (- 24% YoY, -82% QoQ). UE also recorded higher financing costs from the acquisition of 79 Anson and the completion of UE Bizhub East.

How much is needed to purchase the remainder of WBL shares? We expect UE to fork up around SGD754m (61.7% of WBL share capital), not pertaining to additional expenses incurred during the takeover. This implies a takeover valuation of 1.3x P/B and 6.6x EV/EBITDA on WBL. UE is still waiting on a small percentage of shares from shareholders which we expect them to receive before the deadline on 29th of May. UE will not be purchasing Lee family’s stake of 38.3%; hence will not incur the full brunt of the takeover costs. While UE’s balance sheet is likely to be stretched to 1.8x net gearing after the restructuring, we expect earnings from Orchardgateway in 2014 will relieve part of the debt burden. UE has already drawn out a SGD500m MTN loan for this acquisition.

No property earnings recognition as expected. No revenue has been recorded yet again for this quarter. We expect 8 Riversuites will begin construction next quarter, while Austville Residences will be fully recognised in 2014. As for Orchardgateway, so far UE has incurred SGD186m property development costs, of which will be returned to UE as cash by completion by early 2014.

Maintain BUY. Valuation wise, UE remains a buy as it trades at a discount to its RNAV of SGD5.36/share. We maintain our TP of SGD4.05/share, with a 25% discount to RNAV.

Source: Maybank Kim Eng Research - 16 May 2013

[felixleong]

gearing seems too high
any mistake could be fatal to the company?

[pianist]

Just curious, is the recently 500m mtn program meant for wbl acquisition? If so, it doesn't seems enough. Any news whether there will be rights issue?

[felixleong]

yup, probably and also may not be enough... a rights issue would be very painful for shareholders, given the current market sentiments

[Behappyalways]

share price will come under pressure tomorrow...(no vested interest)

PROPOSED RENOUNCEABLE UNDERWRITTEN 1-FOR-1 RIGHTS ISSUE OF UP TO 326,620,154 NEW ORDINARY SHARES IN THE CAPITAL OF UNITED ENGINEERS LIMITED
http://info.sgx.com/webcoranncatth.nsf/V...700431648/$file/AnntonRightsIssue11Jun2013.pdf?openelement