United Engineers

[thefarside]

I think the Lees and Tans really bad blood. Once Tans committed their cash flows to ARA, Lees putting up UE for sale. OCBC obviously on non core divestment mode and they both know how much WBL is worth ie at least 30% more based on Churchill report.

You don't think the Tans have sufficient outside resources to fund rights for a Straits Trading a bid for UE? One of the things that Chew Gek Khim herself has said is she does not mind reducing her family stake in the company, possibly to new money. Plus the two big fund manager (Aberdeen and Third Avenue) are probably willing to back her, if it comes down to that.

Thing is she may have already moved on, after satisfying the need to have a jiao dai already by giving the Lees a good kicking on the head over the WBL fight. What is there to be gained by Straits Trading buying over UE at this price?

[opmi]

I doubt third ave and Aberdeen would put fresh money for Chew to play with. WBL-STR swap probably one off.

Kick in the head? UE margin up to buy undervalued assets and now on track to realise profit. Who is the winner here?

[freedom]

What profit from WBL?

The auto business is sold slightly above book only.

UE paid much higher price for WBL.

The US listed tech business is still killing WBL.

The Chinese property business isn't doing that well, especially in Shenyang.

[specuvestor]

Think the Churchill report is pretty well done. But I disagree that STRTR is or able to put a bid for UE. I also don't think 3rd Avenue and Aberdeen will support a bid after they did the swap

Since WBL is on breakup mode, it won't be long to see if Churchill implied valuation of WBL at ~$5.80 is realisable. The auto business is sold above WBL IFA valuation of $388m. But the big swing in realised valuation is indeed going to be the Chinese properties.

[greengiraffe]

Someone with vested interests provided good insights for a comprehensive report so that they can look forward to maximise their value?

Odd Lots Vested
UE, WBL

Think the Churchill report is pretty well done. But I disagree that STRTR is or able to put a bid for UE. I also don't think 3rd Avenue and Aberdeen will support a bid after they did the swap

Since WBL is on breakup mode, it won't be long to see if Churchill implied valuation of WBL at ~$5.80 is realisable. The auto business is sold above WBL IFA valuation of $388m. But the big swing in realised valuation is indeed going to be the Chinese properties.

[freedom]

The financial effects of the Proposed Disposal on the net tangible assets (“NTA”) per share,
earnings per share (“EPS”) and gearing of the Group, have been prepared basedon (i) the
Group’s audited consolidated financial statements for the financial year ended 31 December
2013; and (ii) assuming the attributable net disposal gain of approximately $17.1 million, are
set out below. The financial effects below are purelyfor illustrative purposes and are
therefore not necessarily indicative of the actual financial position of the Group after
Completion.

From the above statement, it is quite clear that the gain on the book from the sale of auto business is merely 17.1 million. I don't know what assets are included, maybe those more valuable assets in the auto business are not included. But from a simple view point, the auto business did not fetch significantly above the book.

[specuvestor]

The statement is accounting wise correct. Whether UE bought WBL at $0.50 or $4.50 this accounting treatment would remain

[thefarside]

I doubt third ave and Aberdeen would put fresh money for Chew to play with. WBL-STR swap probably one off.

Kick in the head? UE margin up to buy undervalued assets and now on track to realise profit. Who is the winner here?

Actually I thought Straits Trading did well in the play for WBL. Considering that the stock was dead money for years with no prospect of turning around without significant effort, they (Straits Trading) managed to;
- get everyone's money out (theirs, Aberdeen and Third Value) in a matter of months for deployment elsewhere,
- at a reasonable premium to existing businesses book value,
- with no need to sweat/take risk/the hard work of doing the WBL breakup,
- nor take on the development/execution risk in the so-called valuable properties in China which is supposedly where most of the WBL upside is.

Some more got the bonus of putting UE (and by default their nemesis the Lees) through a punishing rights issue to fund the acquisition and thrashed the 7% UE share block that WBL has - their co-partner in blocking a hostile assault on UE.

So UE is a winner here. Agreed.

[freedom]

sorry that I failed to see how UE is a winner from all the above points. What exactly did UE gain?

[opmi]

"punishing rights issue" - those who subscribed to rights are the happiest. $1.50 issue price for $2.80 now.

Yes. Aberdeen & TAM got their money out. (Out of former going nowhere WBL into STR) You think they will put in more money??? Though TAM seems to
think highly of STR investment into ARA (see their shareholder letters)