Elliott’s Deal to Buy Cubic Is Topped by $2.41 Billion Offer
(Bloomberg) -- Singapore Technologies Engineering Ltd. offered $2.41 billion to purchase Cubic Corp., topping a previous deal involving Elliott Investment Management for the U.S. defense electronics maker.
The unsolicited proposal values Cubic at $76 a share, the San Diego-based company said in a statement, a 9% premium over the closing price on March 19. After the prospective deal, Singapore-based ST Engineering intends to sell Cubic’s defense operations to an affiliate of Blackstone Tactical Opportunities and keep a transit business.
Cubic rose 7.7% to $75.10 at 2:48 p.m. Monday in New York after climbing 9.2%, the most intraday since the Elliott deal was announced Feb. 8. The stock had climbed 81% in the 12 months through March 19.
The offer throws a wrinkle into a pact that has been about a half-year in the making. The Singapore company’s proposal could face regulatory hurdles in the U.S. as it would put critical defense and transit technologies in foreign hands.
Affiliates of Elliott and Veritas Capital last month agreed to buy Cubic for $70 a share, for an equity value of about $2.21 billion, based on the number of outstanding shares -- a deal that would take the company private. Cubic on Monday continued to recommend that shareholders vote in favor of that agreement, which was expected to close next quarter, but said it would engage with ST Engineering to evaluate its proposal.
Elliott declined to comment, and Veritas didn’t return a request for comment.
Interest in acquiring Cubic, which provides communications and combat-systems technology as well as ticketing systems for New York’s and other public transit systems worldwide, dates back to September, the company said in a regulatory filing last month.
As recently as January, an entity identified in the filing as Strategic Party C made a nonbinding expression of interest at as much as $75 a share and said it would seek to sell the defense business. Cubic found that the party hadn’t “provided a clear path to achieve regulatory approvals” and that the party couldn’t provide a firm offer in the near term.
ST Engineering produces defense, electronics and technology services for military, marine and urban infrastructure uses. Half the company is owned by Temasek Holdings Pte., Singapore’s state-owned investment firm, according to data compiled by Bloomberg.
ST Engineering said in a statement filed with Singapore authorities that it has received regulatory approvals for past acquisitions in the U.S. and that Temasek intends to vote in favor of the Cubic deal.
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