ST Engineering raises bid for Cubic Corp to US$78 per share

The new offer represents a premium of 11.4 per cent over the US$70 per share in cash proposal agreed to by Cubic.
The new offer represents a premium of 11.4 per cent over the US$70 per share in cash proposal agreed to by Cubic.ST PHOTO: KUA CHEE SIONG

SINGAPORE (THE BUSINESS TIMES) - Singapore Technologies Engineering (ST Engineering) has proposed to acquire all of New York-listed Cubic Corp's outstanding stock for US$78 per share in cash, up from its previous offer of US$76 a share.

In a bourse filing on Tuesday morning (March 30), the group announced that it delivered the revised proposal to Cubic's board.

No definitive terms or agreements have been agreed upon or executed, said ST Engineering. There is also no certainty or assurance that its proposal will be successful or will materialise, it added.

The group's new offer represents a premium of 11.4 per cent over the US$70 per share in cash proposal agreed to by Cubic with an affiliate of Veritas Capital and Evergreen Coast Capital Corp, which was announced on Feb 8, 2021.

ST Engineering's latest announcement confirms an earlier Dow Jones report that the group's offer for Cubic had been boosted to US$78 a share. Citing people familiar with the matter, the newswire early on Tuesday morning noted that ST Engineering's move came after competing private equity duo, Veritas Capital and Elliot Management Corp, raised their bid to US$72 a share from the US$70-per-share offer.

Neither of the revised bids had been previously reported at the time of publishing.

ST Engineering plans for Cubic's transportation systems (CTS) business to serve as the global headquarters of its smart mobility business. The group also intends to invest in CTS and retain the "Cubic" brand.

CTS integrates payment and information solutions, and related services, for intelligent travel applications in the transport industry. It processes more than 24 billion transactions annually and over 60 per cent of public transit rides in the United States, Britain and Australia are taken using its systems.

ST Engineering has also partnered with affiliates of Blackstone that will buy Cubic's defence business immediately following its acquisition of Cubic. The transaction will be subject to customary closing conditions, including anti-trust and foreign direct investment approvals.

The deal and sale of the defence business to Blackstone will require ST Engineering shareholders' approval, but major shareholder Temasek already plans to sign a voting agreement to vote in favour of it.