Thursday, November 20, 2014
UE E&C: In the midst of a voluntary conditional offer by Southern Capital group, a private equity firm, at $1.25/share. The company will be seeking shareholders' approval at an EGM scheduled on 28 Nov. United Engineers, parent of UE E&C, has given its undertaking to sell its entire 68.2% stake in the company. However, we note second largest shareholder, Singapore Tong Teik, has increased its stake in UE E&C from 4.9% to 6.1% on two occasions following the offer announcement, snapping up 1.23m shares at an average $1.257 each, from the open market. With UE E&C currently trading above the offer price, we do not rule out the possibility that rubber trader, Singapore Tong Teik could be angling for a counter-offer. At $1.275, UE E&C trades at 4.8x forward earnings and 1.3x P/B.