CATALIST-LISTED lubricant manufacturer United Global 43P : 43P 0% is facing a privatisation bid that values the company at some S$142.3 million, according to an offer announcement on Friday (Dec 10).

The offeror - an investment vehicle whose owners include 3 company directors - is dangling S$0.45 for each share in United Global, under the voluntary unconditional cash offer.

The offer price marks a premium of 12.5 per cent to the last transacted price of S$0.40, before United Global called a trading halt on Dec 9, and a premium of 16.2 per cent over the 6-month volume-weighted average price of the stock.

Offeror DMW Investments is 35 per cent-owned by United Global chief executive Tan Thuan Hor, 5 per cent-owned by chairman Edy Wiranto, and 5 per cent-owned by executive director Ety Wiranto. The remaining 55 per cent is held by United Global shareholder Wiranto.

The offeror's shareholders together have a stake of more than 82.9 per cent in United Global. They and 7 other United Global shareholders have made irrevocable undertakings - representing more than 90 per cent of United Global shares - to accept the offer.

The offeror said that it plans to de-list the company, and to exercise the right of compulsory acquisition if it gets ahold of at least 90 per cent of the shares that it does not already own.

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That is as privatisation would give the offeror and management "more flexibility to manage the business of the company, optimise the use of its management and capital resources and facilitate the implementation of any operational change", it added in its offer announcement.

Citing "low trading liquidity", it also said that the offer would give shareholders an opportunity to realise their investment at a market premium that might otherwise not be available.

Still, the offeror said it does not intend to make major changes to United Global's business or management team, or redeploy the fixed assets of the company.

The offer document is expected to be sent out in 14 to 21 days, and will be open for acceptance by shareholders for at least 28 days after that. Shareholders have been told to exercise caution and seek appropriate independent professional advice when dealing in the shares.