IN A surprise turn of events, minority shareholders of United Engineers (UE), including property developer Oxley Holdings, have foiled a bid by UE' s new shareholder, Yanlord Perennial Investment (YPI), and UE' s former shareholder, OCBC, to sell their shares in WBL to UE.

Out of the 171.3 million UE shares that voted on the deal, 67.44 per cent rejected it.

Oxley has a 15 per cent stake in UE, or just over 95.7 million shares.

Oxley deputy CEO Low See Ching told The Business Times by phone: " Our board of directors requested us to appoint an independent corporate advisor to evaluate the deal as we own a substantial stake in UE.

" It took our advisor two weeks to assess the deal. They came out with a very comprehensive report that was tabled to the Oxley board to evaluate. The decision by the board was made yesterday night and the majority voted no. So we have to carry out that decision."

YPI has controlled the board of UE since late last year. It owns a 33.5 per cent stake in UE, which it purchased from the OCBC group and the OCBC Lee family for S$2.60 a share last July.

At the same time, YPI agreed to buy 10 per cent of WBL for S$2.07 a share. YPI also committed to acquire another 19.9 per cent of WBL from OCBC down the road.

In December, the new board of UE proposed that UE make a cash offer for WBL at the same price YPI had paid, " taking into account that certain WBL shareholders had publicly disclosed that they were willing to divest their shares" .

These interested person transactions required the approval of UE' s minority shareholders.

Last week, The Business Times questioned if UE was paying a fair price for WBL.

Although it' s not unusual for a large Singapore property company like UE to trade at 0.9 times book value, companies of a comparable size to WBL that develop properties in China trade at a mere 0.5 times price-to-NTA (net tangible assets).

At S$2.07 a share, UE would only receive a 21.6 per cent discount to WBL' s net asset value per share of S$2.64 at the end of last year.

Shares of United Engineers closed unchanged at S$2.56 on Friday.