not vested
Yanlord Land Group: Mandatory General Offer for UEL
Yanlord Land Group Limited (Yanlord) announced that it has acquired its partners’ stakes in United Engineers Ltd (UEL), and now holds 35.27% of its ordinary shares.
The total cash amount paid by Yanlord amounted to S$229.7m, and translates into a value of S$2.60 per UEL share.
It is therefore required to make a mandatory general offer for all of UEL ordinary shares it does not hold and also a comparable offer for UEL preference shares.
The mandatory conditional cash offer price of S$2.60 per UEL ordinary share is slightly below UEL’s closing price of S$2.62 on 25 Oct, and is also at a 16.7% discount to UEL’s NAV/share (as at 30 Jun 2019), implying a takeover offer at 0.83x PB.
As such, we believe the acceptance rate for this general offer would be low.
This cash offer is conditional upon Yanlord garnering valid acceptances that will result in it holding more than 50% of the total voting rights attributable to the UEL ordinary shares.
We maintain BUY and our fair value of S$1.56 on Yanlord.
Source: OCBC