Published March 4, 2009

So near and yet so far - UOL fails in bid to take over UIC

By NISHA RAMCHANDANI

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(SINGAPORE) UOL Group's $1.15 billion bid for the shares it does not own in United Industrial Corp (UIC) has failed, narrowly missing the mark by garnering only 48.94 per cent of the voting rights in UIC.

The takeover was conditional upon the offerer and parties acting in concert with it getting more than 50 per cent of the voting rights. UOL's offer closed at 5.30pm yesterday, with acceptances representing 3.37 per cent of total issued shares. Prior to the offer, UOL and the relevant parties held about 30.2 per cent of UIC.

A further stake of approximately 15 per cent was acquired or agreed to be acquired after the offer announcement date.

Because of the lapsing of the offer, UOL, controlled by UOB chairman Wee Cho Yaw, will not be making an offer for Singapore Land - the jewel in the UIC crown.

Previously, UOL had said that if it gained control of more than half of UIC, it would make an offer for Singapore Land at $3.57 per share.

Analysts have previously viewed the $1.20 per share bid price for UIC as unattractive. They also thought that shareholders - including Filipino tycoon John Gokongwei Jr with a 35 per cent UIC stake - were unlikely to accept the offer. Mr Gokongwei himself had tried to take over UIC in 2005.

UOL later defended its price offer, saying that 'various factors, including the continuing volatility in global credit and capital markets, the difficult economic conditions, and a deteriorating property market in Singapore' had been taken into account.

UOL made the mandatory cash offer after the stake in UIC held by the group and its related parties crossed the trigger mark of 30 per cent to 30.2 per cent, from approximately 29.1 per cent.

The offer represented an opportunity to 'better align the strategic objectives' of UIC and UOL, UOL had said previously. UOL and UIC have joint investments in retail commercial and hotel projects.