Tussle over for Straits Trading … almost

Lees say yes to Chew Gek Khim’s offer, but will OCBC?

A rare and intense corporate tug-of-war between two distinguished families has ended with one side throwing in the towel, but not without first squeezing the other side.

The Lees of OCBC fame yesterday retreated from the tussle for one of Singapore’s oldest firms – Straits Trading Company (STC) – by accepting the offer of $6.70 a share from the family of late banker Tan Chin Tuan.

When contacted, a spokesman for Tecity – an investment firm run by the Tans – said: “We welcome the Lees’ decision. It is a gesture of friendship.”

Two months ago, ties between the two families appeared less than friendly in public.

Both had been locked in a staring match since January, when Tecity – led by Ms Chew Gek Khim (picture), granddaughter of the late Dr Tan – first proposed $5.70 per share to take over STC.

The offer for the firm, which holds diverse assets such as properties in the prime Orchard area and a tin smelting business, breathed life into an otherwise illiquid stock.

The market’s excitement was fanned further when the Lees, holding a direct 7-per-cent stake, flexed their financial muscle – but their counter bid was just a few cents more.

Word on the street was that the Lees, whose patriarch is the late banker-philanthropist Lee Kong Chian, were trying to provoke Ms Chew to raise her offer.

She did so, twice, arriving at a total improvement of $1 or 17.5 per cent from the original price. But Ms Chew – who in 2006 publicly fell out with Lippo Group over boardroom manoeuvres in Robinson, the retailer her grandfather built up – also made it clear her third call would be the final one.

Yesterday, the Lees said “yes” and withdrew their offer of $6.55 for STC.

In their statement, the Lees said they arrived at that decision after “taking into account the foregoing as well as the current volatile market conditions”.

They also “noted” that it was “in response to” their two counter offers that total STC shareholder value has grown by about $326 million.

But for Ms Chew, the battle is not yet over.

Tecity’s offer, which expires on Thursday, is conditional upon its amassing at least 50 per cent of STC. Otherwise, the takeover plan fails.

With the Lees’ direct stake in the bag, Ms Chew will have 35.1 per cent, up from the latest figure of 28.1 per cent last Friday.

The swing vote is held by OCBC and Great Eastern Holdings, which hold a combined 26 per cent of STC and are substantially owned by the Lees.

Last month, OCBC said it did not intend to accept Ms Chew’s offer, saying the OCBC stable and the Lees could “jointly unlock value in Straits Trading”.

But with yesterday’s development, OCBC spokesperson Koh Ching Ching told Today: “We are reviewing the matter.”

Tecity has held STC shares since the 1950s and has said publicly that it plans to work with STC’s management and directors to “undertake a strategic and operational review” of the 121-year-old company.

Source : Today – 3 Mar 2008

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