United Engineers/ UE E&C

United Engineers/ UE E&C: United Engineers (Utd Eng) has given its undertaking to sell its entire 68.2% stake in UE E&C at $1.25 apiece, through a voluntary conditional offer by Southern Capital group, a private equity firm. Assuming the stake-disposal of UE E&C is completed, proforma FY13 NTA would rise 3.9% to $2.70/share. The divestment of the integrated engineering services provider will raise $230.2m for Utd Eng, in addition to $424.3m from the proposed sale of its automotive ($300.1m) and electronic ($124.2m) businesses which the group entered agreements to dispose in the past two months. The divestments of its non-core assets look to pave the way for a potential sale of its property assets, comprising six wholly-owned mixed investment properties in Singapore, as well as seven properties under development in Singapore, Malaysia and China. On 27 Aug, Utd Eng entered into exclusive talks with TCC Top Enterprise, a company controlled by Charoen Sirivadhanabhakdi and Khunying Wanna Sirivadhanabhakdi, in relation to a possible transaction. The exclusive period will cease by the end of today. At $2.84, United Engineers is valued at a 14% discount to consensus RNAV of $3.30, based on property valuations as at Dec 2013. Latest broker ratings: CIMB maintains Hold with TP of $2.84