OCBC Report 20 May 14

KEY IDEA Wilmar: Improves offer for Goodman Fielder Wilmar International Limited (WIL), together with 50-50 JV partner First Pacific Company Limited (FPCL), has improved its offer to acquire the entire issued share capital of Goodman Fielder (listed on ASX and NZX); this up to A$0.70/share after having its initial offer of A$0.65 rejected by Goodman’s board as being too low and “materially undervalues” the company. Goodman’s board has accepted the improved offer and will allow the JV non-exclusive access to due diligence over some four weeks. While we are positive on the acquisition, we note that is not a done deal; it may also take some time to reap the full benefits. Hence we are not making any changes to our FY14 and FY15 estimates for now. We also maintain our HOLD rating with an unchanged S$3.36 fair value (12.5x blended FY14/FY15F EPS).(Carey Wong) MORE REPORTS Vard Holdings: Clinches contract for one PSV Vard Holdings Limited (VARD) announced that it has won a contract for the design and construction of a Platform Supply Vessel (PSV). This is a repeat order for a vessel of the same specification for Carlotta Offshore. This vessel is a multifunctional PSV of VARD’s internal design, is ~4,000 DWT and will be used for standby, rescue, fire-fighting and oil recovery operations. Delivery of this vessel is scheduled in 3Q15 from VARD’s Vietnam yard. Although the value of the contract was not disclosed, we believe it is worth NOK300m. This brings its YTD order wins to ~NOK5.8b, based on our estimates. We maintain our HOLD rating on VARD, as its share price is trading close to our fair value estimate of S$0.97 (pegged to 9x FY14F EPS). (Wong Teck Ching Andy)

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NEWS HEADLINES - US stocks ended Mon’s thinly traded session higher with small-cap and tech companies leading the gains. - Goodpack's shares continued marching to record highs yesterday, amid news reports that it is in advanced talks with US private equity firm KKR & Co. - Singapore's domestic wholesale trade fell 2.8% in 1Q14 compared to a year ago, data released by the Department of Statistics yesterday showed. - Olam International has secured a US$2.22b revolving credit facility, which will be used to refinance debt and to meet working capital and general corporate funding needs. - Singapore is seeking a private developer/operator for a proposed new waste-to-energy plant which will generate power even as it incinerates the ever-increasing volumes of waste here. - ST Engineering Ltd announced its aerospace arm has acquired 100% equity interest in Aviation Academy of America, Inc., for a purchase consideration of US$811,238 (~ $1.02m). - Saizen REIT is divesting its residential property Saumur Meinohama II to an independent private investor for a cash consideration of JPY60m (S$0.7m).