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The Lees yesterday said they had withdrawn their offer of $6.55 per share and will take up the Tans' offer of $6.70, which closes on Thursday.
They said they had made the decision following a 17.5 per cent rise in the value of Straits Trading shares since the bidding war broke out at the start of the year.
'This has increased total Straits Trading shareholder value by about $326 million,' they said in a statement.
The Lees also cited the current volatility in the stock markets as being among their considerations.
The surprise move will be a big boost for the Tan family, which made the initial offer in January at $5.70 a share in an attempt to gain control of the company.
While the Lees own just 7.1 per cent of Straits Trading, the end of the bidding war, coupled with bearish markets, is likely to persuade more Straits Trading shareholders to take up the Tans' offer, said observers.
Up till last Friday, the Tans had received acceptances representing 2.04 per cent of Straits Trading.
They had owned 22.46 per cent of the company before they made their first offer. They currently own 26.05 per cent of the shares after buying some shares in the open market.
'We welcome the Lees' decision. It is a gesture of friendship,' said a spokesman for Tecity, the investment vehicle of the Tans which is headed by Ms Chew Gek Khim - Mr Tan's granddaughter.
Observers noted that just three weeks ago, when the Lees made their last offer at $6.55, the family had said it would want board representation if it retained control of the company.
Through their control of OCBC, and its unit Great Eastern Holdings, the Lees have an effective interest of about 33 per cent, the biggest block of shares, in Straits Trading.
Still, some market watchers have been sceptical about the Lees' defensive efforts as their counterbids have all been just five to six cents higher than the Tans' offers.
Sceptics also noted that as they would be starting from a lower base, the Lees would have to cough up considerably more cash than the Tans to cement control of Straits Trading.
All eyes will now be on what OCBC and Great Eastern will do in the next few days, as the deadline for the Tans' offer comes up.
OCBC had said on Feb 15 that it would reject both offers for its Straits Trading shares as they were 'long-term investments'.
But the bank backed down from that position a week later, after the Tans raised their offer three days later.
