<article>Private equity firm <a href="http://www.southerncapitalgroup.com/" target="_blank">Southern Capital Group</a>’s offer to buyout Singapore listed engineering and building company <a href="http://www.ueec.sg/" target="_blank">UE E&amp;C</a> for S$1.25 apiece closes on January 28, but the move to take company private may yet be thwarted by rubber industry veteran Oei Hong Bie.</article>

Private equity firm <a href="http://www.southerncapitalgroup.com/" target="_blank">Southern Capital Group</a>’s offer to buyout Singapore listed engineering and building company <a href="http://www.ueec.sg/" target="_blank">UE E&amp;C</a> for S$1.25 apiece closes on January 28, but the move to take company private may yet be thwarted by rubber industry veteran Oei Hong Bie.
<a href="http://www.rcma-commodities.com/home" target="_blank">Tong Tiek</a>, a company linked to Hong Bie has been buying up shares in UE E&amp;C from the open market, and is estimated to own around eight per cent in the company currently. As per SGX rules, a company cannot be taken private if the proposal is vetoed by a shareholder who owns 10 per cent or more in it. Tong Tiek, which had less than five per cent stake in UE E&amp;C in October 2104, has steadily been mopping up shares in the company since Southern Capital Group had announced the deal.
Southern Capital said it plans to buy the 68.2 per cent in UE E&amp;C that is held by <a href="http://www.uel.com.sg/" target="_blank">United Engineers</a> for S$1.25 per share, valuing this stake at S$230.2 million and the company at S$337.5 million.
At this price, many analysts feel that that UE E&amp;C’s valuation is relatively cheap, especially considering that it had $164.2 million in cash and bank balances (as of September 2014), as well as trade and other receivables to the tune of S$129.2 during the same period.
Oei Hong Bie’s move may be aimed at preventing Southern Capital from delisting UE E&amp;C, or may even be linked to (trying to force the private equity player to) raise the acquisition price. Many of the minority shareholders are believed to be holding out for a higher price, and are not keen to exit at the current price, as UE E&amp;C’s shares have been trading above Southern Capital&#8217;s offer price since November 10, the day the PE had announced the deal.
Last week, financial advisory firm <a href="http://www.phillip.com.sg/" target="_blank">Phillip Securities</a> said Southern Capital Group’s offer was fair, but ‘not compelling’ and suggested that shareholders sell their holdings in the open market to get a price higher than S$1.25, failing which, it said that accepting the PE firm’s offer would be the next best thing.
Southern Capital, which has offices is Singapore and Kuala Lumpur, traditionally acquires and grows middle market businesses with enterprise values of between US$20-$200 million, and is the lead or sole investor in all of its investments.
The private equity firm&#8217;s investments include <a href="http://www.fullertonhealthcare.com/" target="_blank">Fullerton Healthcare</a>, <a href="http://www.novsn.com/" target="_blank">Novation Solutions</a>, (formerly HSBC Precision Printing), <a href="http://www.fos.com.my/" target="_blank">F.O.S Apparel Group</a>, <a href="http://www.catermas.com.sg/" target="_blank">Catermas Engineering</a>, <a href="http://lockandstore.com/" target="_blank">Lock + Store</a> and <a href="http://www.mentormedia.com.sg/" target="_blank">Mentor Media</a> among others.

Southern Capital’s offer for UE E&C closes Jan 28

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Southern Capital’s offer for UE E&C closes Jan 28

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