Short end of the stick for UE E&C minority owners?

MINORITY shareholders of mechanical engineering and construction firm UE E&C Ltd, a subsidiary of United Engineers Ltd (UE), must be watching events relating to the ongoing takeover of their company with a mixture of fascination as well as trepidation.

Fascination because a standoff appears to be developing between the offeror Southern Capital Group (SCG) and another substantial shareholder Singapore Tong Teik (STT); trepidation because as things stand now, the final endgame appears hugely uncertain and could well be to their disadvantage.

SCG now either owns, controls or has agreed to buy about 78 per cent of UE E&C, which means that all it needs is a further 12 per cent in order to fulfil its original stated intention of taking the firm private since the delisting/privatisation threshold for the local market is 90 per cent in the hands of a single shareholder.