Thursday, January 31, 2013

United Engineers Launches Rival Bid for WBL - Another F&N in the making?


United Engineers (UE) is launching a takeover bid for WBL Corporation.  Will this be like another F&N?  UE's last done price was $3.33 while WBL's last done price today was $4.20.  Looking at UE's price chart over the past few months, one wonders whether there might have been some leakage of news.  The share price of around $2.40-$2.50  rose sharply from Nov 2012 onwards to today's current price of $3 over dollars.  There was also a significant spike in volume.

Anyway, UE is looking for more recurring income and thus is looking to use up its war chest of money to buy WBL which has businesses spanning automotive, property and technology.  Considering that UE is mainly involved in property development, they might be interested in spinning off some of these businesses subsequently.  But that is probably anyone's guess.

It looks like the stock price of both UE and WBL is only likely to surge as shareholders await for the bidding price to go up just like the case of F&N.

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