Straits Trading / WBL

Straits Trading / WBL: Straits Trading sh/h yday gave approval for the firm to purchase a further stake in WBL by issuing new shares, paving the way for it to make a formal offer for other WBL shares it doesn't yet hold. The move is part of Straits Trading's strategy to transform its existing minority stake in WBL to a strategic one, following talk that it had not been satisfied with the performance of the technology, automotive and property group. Straits Trading has proposed to buy 64.02m WBL shares, or 23.61% stake from Aberdeen Asset Mgt and Third Avenue Management. This will be paid for with the 68.5m new Straits Trading shares to be issued, in a share swap of 1.07 shares for every WBL share. The acquisition will bring its combined holdings, together with parties acting in concert, to 44.6% or 120.86m shares. It will transform Straits Trading into WBL's largest shareholder. With the approval given by its shareholders, Straits Trading yday announced its "firm intention" to make a mandatory conditional offer for all other WBL shares. WBL shareholders will have the option of receiving either 1.07 new Straits Trading shares or $3.41 in cash for each WBL share they hold. At the EGM, Straits Trading said that the acquisition will help to "unlock value" in WBL as well as broaden Straits Trading's investor base. Aberdeen and Third Avenue will hold substantial stakes – 6% and 12% respectively - in Straits Trading after the share swap. Their stakes, however, will be reduced if WBL shareholders choose the share option under the conditional offer. Nevertheless, even after the approval of its shareholders, Straits Trading's bid for the rest of WBL may not be all smooth-sailing. OCBC, which holds 5.84% of WBL, has expressed concerns that the offer may be too low. It noted that the cash offer of $3.41 a share is below WBL's latest reported NAV of $3.48/sh. Another substantial shareholder, OCBC's insurance arm Great Eastern Holdings, owns a 14.81% stake. WBL saw the departures of its CEO Tan Choon Seng and chairman Ng Ser Miang last year, amid apparent unhappiness over its performance by Straits Trading, Third Avenue and Aberdeen.