The recommendation came as the Feb 22 deadline loomed for the best offer now on the table of $6.50 a share from Tecity, an investment vehicle of the family of OCBC Bank's former chief, the late Dr Tan Chin Tuan.

'Shareholders who hold a long-term view of their investments in the shares may wish to reject the revised Tecity offer,' the adviser said in a shareholder circular.

The circular also concluded that the revised Tecity offer price was 'reasonable but not compelling'.

Tecity's $6.50 a share offer, valuing Straits Trading at $2.1 billion, was 0.4 per cent below the firm's book value as at Sept 30, according to a report by CIMB-GK, the adviser to Straits Trading's independent directors.

However, CIMB-GK advised shareholders with a short-term view to sell their shares on the open market, if they get a better offer, or accept the Tecity bid.

Straits Trading said it would expedite the announcement of its preliminary year-end results and proposed to do so by Feb 26.

A healthy set of results is expected, and investors will be keen to know this before the Feb 22 Tecity deadline.

An updated statement of prospects said the firm was expected to report 'positive operating profit in the fourth quarter of financial year 2007'. It also noted that 'further positive fair value adjustments are expected from the Group's investment properties'.

An Ernst & Young auditor letter noted: 'Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which causes us to believe these assumptions do not provide a reasonable basis for the forecast.'

Properties owned by Straits Trading include Rendezvous Hotel Singapore with its retail arcade, which is valued at $181.4 million.

A takeover battle ensued in recent weeks for one of Singapore's oldest listed firms.

In early January, Tecity offered $5.70 a share for Straits Trading. Then the Lee family, who founded OCBC, trumped that with a $5.76 offer on Jan 24. Tecity responded swiftly on Jan 28 with its $6.50 bid.

ALVIN FOO