Yanlord now plans to delist UE in buyout offer

SINGAPORE (THE BUSINESS TIMES) - With its stake in United Engineers (UE) edging towards the critical 90 per cent mark, Chinese developer Yanlord Land Group now plans to delist UE, it said in an update on Monday (Dec 16).

This reverses its initial proposal at the launch of the offer exercise in October, when Yanlord's offer vehicle, Yanlord Investment (Singapore), said that it did not intend to delist or privatise UE.

But the offeror had also noted at the time that it could still re-evaluate its position on delisting, if UE did not meet the free float requirement by the offer's close.

Since then, the offeror and its concert parties have built up an interest of about 81.06 per cent of ordinary shares in UE, including those agreed to be acquired. It also holds sway over about 99.16 per cent of the company's preference shares, which are not counted in the free float requirement.

So, "having evaluated its current level of shareholding", the offeror has now said that it will not act to preserve UE's listing should the stock's free float fall below the threshold, under listing rules, that mandates at least 10 per cent of shares be kept in public hands.

"Furthermore, the offeror, if and when entitled, intends to exercise its rights of compulsory acquisition under Section 215(1) of the Companies Act," it added in its bourse filing.

A slew of listed firms have gone private in Singapore over the last few years as major shareholders, institutional investors and industry peers buy up companies, with low valuations being one driving factor.

As of July this year, 14 companies were undergoing privatisation or in the process of being bought out this year, the highest number since 2016, Bloomberg reported in July citing a report from DBS Group.

Yanlord launched a mandatory offer for UE in late-October at $2.60 a share, after buying out the consortium partners, Perennial and Heng Yue, with whom it had made an earlier joint bid for UE in 2017. It later raised its offer price to $2.70 a share, which values UE at 1.72 billion.

With the most recent decision by the offeror, the close of the offer has now been extended from Dec 26 to Dec 30 at 5.30pm, or any later date that the offeror may still announce.

Shareholders who have accepted the offers can withdraw their acceptances within eight days of the latest move, while those who do not wish to withdraw their acceptances need not take any action.

Yanlord's attempted takeover of UE has also triggered a chain offer for UE subsidiary WBL Corp, an unlisted public company, at a price of $2.5947 in cash for each share.

SAC Capital, the independent financial adviser for the WBL deal, has found the offer "fair and reasonable" and advised shareholders to accept it, in a circular also sent out on Monday.

UE shares closed at $2.69 on Monday, down $0.01 or 0.37 per cent, while Yanlord shares shed $0.01 or 0.85 per cent to $1.17, before the latest announcement.

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