Catalist-listed lubricant manufacturer United Global has received a privatisation bid that values the company at around $142.3 million.
The offeror – DWM Investments – plans to put in 45 cents for each share, under the voluntary unconditional cash offer, United Global states in its regulatory filing on Dec 10.
The offer price represents a premium of 12.5% over the 40 cents at which United Global was transacted at, before a trading halt was called on Dec 9. This represents a 16.2% premium over the six-month volume weighted average price per share of the counter.
An investment holding company, DMW Investments was set up on Nov 22 in Singapore. It has an issued share capital of $2,000 comprising 2,000 ordinary shares.
Of this, 35% is owned by Tan Thuan Hor, CEO of United Global, while 55 is owned by chairman Edy Wiranto and another 5% by executive director Ety Wiranto. The remaining 55% is held by Wiranto, a shareholder of United Global.
Collectively, these five individuals have a stake of over 82.9% in United Global. Along with seven other shareholders – who hold over 90% of the shares in the company – the individuals have taken irrevocable undertakings to accept the offer.
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DMW Investments is looking to de-list United Global and exercise any rights of compulsory acquisition that many arise.
The move follows “low trading liquidity”, for around 42,408 shares were traded daily on average in the six-month period.
The offeror believes that privatising United Global will allow for “more flexibility to manage the business of the company, optimize the use of its management and capital resources and facilitate the implementation of any operational change”.
See also: Neo Group founder to privatise company at 60 cents per share
DMW Investments says it does not intend to make major changes to the business or the management team. It is also not looking to re-deploy the company’s fixed assets or discontinue the employment of the staff under United Global and its subsidiaries.
Nonetheless, it says it “retains the flexibility at any time to consider any options or opportunities which may present themselves and which the offeror may regard to be in the interests of the company”.
The offer document is slated to be sent out in 14 to 21 days. Shareholders will then have at least 28 days to make an acceptance. They have been asked to “exercise caution and seek appropriate independent professional advice when dealing in the shares”.
Cover image: file photo
