Take It Or Leave It

Source : TODAY, Tuesday, February 19, 2008

$6.70 a share: Tecity makes its final bid for STC

The fight for Straits Trading appears to be reaching its end-game as one party of a 6-week bidding war said it was raising its offer for the second - and last - time.

Yesterday, the family of the late Mr Tan Chin Tuan - through investment company Tecity Group - said it would now offer $6.70 a share for the tin-smelting and property firm, 20 cents higher than its previous offer and 15 cents more than its rival’s. The offer, which ends March 6, would be its last.

“There will be no further revisions to our offer,” said Ms Chew Gek Khim, executive chairman and grand-daughter of the late Mr Tan. She added: “the price now reflects what we believe to be a reasonable valuation of Straits Trading, while presenting an attractive exit for shareholders”.

Tecity has also drawn interest from the family of late rubber tycoon, Mr Lee Kong Chian. The Lees - through Lee Latex - have upped the Tans’ bids twice, each time by a small margin.

Sources told Today the Lees could continue to up the ante. The surprise in Tecity’s statement was not so much that it continued to push the offer higher, but that it called an end to the game. “This gives the other side a lot of leeway to counterbid,” a source familiar with the negotiations said.

The Lees can now just offer a few cents above Tecity’s latest bid with the assurance that they will win the bidding war, he added. The Lees declined comment.

The Lees have added 5-to-6 cents to Tecity’s bids in the last rounds, while Tecity replied to the Lees’ threats by increasing its offer by 74 cents and now, 15 cents.

The new offer values Straits Trading at $2.18 billion. Shares of Straits Trading resumed trading yesterday afternoon and closed at $6.70.

Mr Gabriel Yap, a senior dealing director at DMG and Partners Securities, reckons the firm’s assets are worth around $2.2 billion at current market prices. “The Lees tend to hold investments long term, so it would not be surprising if they up the bid,” said Mr Yap.