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UE E&C bidder cracks major holdout, has enough shares to compulsorily acquire

THE bidder for UE E&C has pried out at least some of the shares held by a major holdout, allowing Southern Capital to compulsorily acquire the rest of the engineering and construction company.

Shares of UE E&C will be suspended after Southern Capital's S$1.25 per share general offer closes at the end of Jan 28.

Southern Capital announced late Tuesday that it had shares and acceptances worth a 92.61 per cent stake in UE E&C. This implied that the bidder had acquired an additional interest of 11.46 per cent since Monday, when it had just 81.15 per cent of shares in its control.

The largest holdout as at end-Monday was Singapore Tong Teik, a private vehicle linked to rubber businessman Oei Hong Bie, which held a 9.2 per cent shareholding in UE E&C. Southern Capital's latest report suggests that Singapore Tong Teik must have sold at least some of its shares.

The suspension was announced on Tuesday upon determination that the UE E&C's free float would not meet the 10 per cent minimum even if Southern Capital, a private equity firm, had not managed to buy up any of Singapore Tong Teik's shares.

That is because the listing rules on the minimum free float do not count substantial shareholdings, which are stakes above 5 per cent, as part of the public float. Southern Capital's 81.15 per cent interest as at end-Monday and Singapore Tong Teik's 9.2 per cent left UE E&C's public float as at end-Monday at just 9.65 per cent.

UE E&C shares closed unchanged at S$1.25 on Tuesday before the suspension was announced.

Southern Capital has said that it does not intend to keep UE E&C listed.

"As stated in the offer document, the offeror intends to make the company its wholly-owned subsidiary and, when entitled, intends to exercise its right of compulsory acquisition," Southern Capital announced.