SMB United Ltd : Voluntary Conditional Cash Offer By Osaki Electric Co., Ltd. For SMB United Limited

SMB UNITED LIMITED

(Company Registration Number: 199506364D) (Incorporated in the Republic of Singapore)

(the "Company")

VOLUNTARY CONDITIONAL CASH OFFER BY OSAKI ELECTRIC CO., LTD. FOR SMB UNITED LIMITED 1. Introduction

The Board of Directors of the Company ("Board") wishes to inform shareholders of the Company (the "Shareholders") that Daiwa Capital Markets Singapore Limited ("Daiwa"), for and on behalf of Osaki Electric Co., Ltd. ("Osaki") has on 28 December 2011 (the "Osaki Offer Announcement Date") issued an announcement (the "Osaki Offer Announcement") that Osaki intends to make a voluntary conditional cash offer to acquire all the ordinary shares ("the Shares") in the capital of the Company (the "Osaki Offer").

2. Principal Terms of the Osaki Offer

The principal terms of the Osaki Offer as set out in the Osaki Offer Announcement are as follows:
(a) Offer Price. Subject to the terms and conditions set out in the offer document to be issued by Daiwa, for and on behalf of Osaki (the "Offer Document"), Osaki will make the Osaki Offer for the Shares, including any and all Shares owned, controlled or agreed to be acquired by any person acting or deemed to be acting in concert with Osaki, in accordance with Section 139 of the Securities and Futures Act, Chapter 289 of Singapore and Rule 15.1 of the Singapore Code on Take-overs and Mergers (the "Code") on the following basis:

For each Share: S$0.40 in cash.

(b) Offer Shares. The Shares will be acquired (i) fully paid, (ii) free from all claims, charges, mortgages, liens, options, equity, power of sale, hypothecation, retention of title, rights of pre-emption, rights of first refusal or other third party rights or security interests of any kind or any agreements, arrangements or obligations to create any of the foregoing and (iii) together with all rights, benefits and entitlements attached thereto as at the Osaki Offer Announcement Date and thereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions (if any) declared, paid or made by the Company on or after the Osaki Offer Announcement Date.
If any dividend, right or other distribution is declared, paid or made by the Company on the Shares on or after the Osaki Offer Announcement Date and Osaki is not entitled to receive such dividend, right or other distribution in full from the Company in respect of any of the Shares tendered in acceptance of the Offer, the Offer Price payable in respect of such Shares will be reduced by the amount of such dividend, right or other distribution.
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(c) Offer Condition. The Osaki Offer will be conditional upon Osaki having received, by the close of the Osaki Offer, valid acceptances (which have not been withdrawn) in respect of such number of Shares which, when taken together with Shares owned, controlled, acquired or agreed to be acquired by Osaki and persons acting in concert with Osaki (whether before or during the Osaki Offer), will result in Osaki and persons acting in concert with Osaki holding such number of Shares carrying more than 50 per cent. of the voting rights attributable to the issued Shares as at the close of the Osaki Offer.
Accordingly, the Osaki Offer will not become or be capable of being declared unconditional as to acceptances until the close of the Osaki Offer, unless at any time prior to the close of the Osaki Offer, Osaki has received valid acceptances in respect of such number of Shares which will result in the Osaki and persons acting in concert with Osaki holding such number of Shares carrying more than 50 per cent. of the maximum potential issued shares in the Company. For the purposes of the Osaki Offer, the "maximum potential issued shares in the Company" means the total number of Shares including any Shares which may be issued pursuant to the SMB Performance Share Plan.
(d) SMB Performance Share Plan. As at the Osaki Offer Announcement Date, and based on announcements issued by the Company on 3 October 2011 and 31 October
2011, awards to receive fully-paid Shares, their equivalent cash value or combinations
thereof ("Awards"), have been granted pursuant to the SMB Performance Share Plan pursuant to which an aggregate of 23,950,000 Shares may potentially be allotted and issued to the grantees of such Awards, subject to the terms of the SMB Performance Share Plan. The terms of the SMB Performance Share Plan provide that the Awards are not transferable, except with the prior approval of the committee administering the SMB Performance Share Plan. Accordingly, the Osaki Offer will not be extended to grantees of the Awards, save that the Osaki Offer will extend to Shares which are validly allotted and issued to grantees prior to the close of the Osaki Offer, in satisfaction of (and in accordance with the terms of) the Awards.
Further details on the terms and conditions of the Osaki Offer are set out in the Osaki Offer Announcement, a copy of which is available on the website of the Singapore Exchange Securities Trading Limited at www.sgx.com.

3. Irrevocable Undertakings

As stated in the Osaki Offer Announcement, certain shareholders (the "Undertaking Shareholders") have each given irrevocable undertakings to Osaki (the "Irrevocable Undertakings") pursuant to which each of the Undertaking Shareholders will agree to, inter alia, accept the Osaki Offer in respect of the Shares held by each of them respectively prior to and up to the close of the Osaki Offer and to undertake to exercise all voting rights attached to their Shares in such manner as to oppose the taking of any action which may preclude, delay, frustrate, restrict or otherwise prejudice the Osaki Offer. The Undertaking Shareholders have undertaken to accept the Osaki Offer in respect of an aggregate of 183,038,039 Shares held by them as at the Osaki Offer Announcement Date, representing approximately 37.42 per cent. of the Shares in issue as at the Osaki Offer Announcement Date.
The Irrevocable Undertakings shall terminate and cease to have any further force or effect on the date on which the Osaki Offer lapses or is withdrawn. Save as aforementioned, the Irrevocable Undertakings remain in full force and effect. Please refer to Section 5 of the Osaki Offer Announcement for further details on such Irrevocable Undertakings.
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4. Indicative Timetable in relation to the Osaki Offer

The Board wishes to advise Shareholders that between 11 January 2012 and 18 January
2012 (both dates inclusive), Osaki is expected to despatch the Osaki Offer Document and enclose the appropriate forms of acceptance. Within 14 days from the date of despatch of the Osaki Offer Document, the Company will be despatching a circular to Shareholders (the "Osaki Offeree Circular") which will contain, inter alia, the advice of the independent financial adviser (the "IFA") and the recommendation of the independent directors of the Company (the "Independent Directors") on the Osaki Offer.
A summary of the key dates mentioned above in relation to the Osaki Offer is set out below: Date of Osaki Offer Announcement: 28 December 2011
Expected date of despatch of Osaki Offer Document: Between 11 to 18 January 2012
Date of despatch of Osaki Offeree Circular: Between 25 January to 1 February
2012 (depending on the date of despatch of the Osaki Offer Document)
In the meantime, the Board wishes to advise Shareholders to refrain from taking any action in respect of their Shares which may be prejudicial to their interests, and to exercise caution when dealing in the Shares, until they have considered the information, the advice of the IFA and the recommendations of the Independent Directors on the Osaki Offer to be contained in the Osaki Offeree Circular.

5. Responsibility Statement

The Directors of the Company (including those who may have delegated detailed supervision of this Announcement) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this Announcement are fair and accurate and that no material facts have been omitted from this Announcement, and they jointly and severally accept responsibility accordingly.
Where any information has been extracted from published or otherwise publicly available sources (including, without limitation, the Osaki Offer Announcement and the Boer Offer Document), the sole responsibility of the Directors of the Company has been to ensure through reasonable enquiries that such information has been accurately and correctly extracted from such sources or, as the case may be, accurately reflected or reproduced in this Announcement.
Any enquiries relating to this Announcement, the Osaki Offer or the Boer Offer should be directed to the following:
Lazard Asia Limited
3 Church Street
#14-01 Samsung Hub Singapore 049483 (65) 6534 2011
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BY ORDER OF THE BOARD

SMB UNITED LIMITED

Lee Wee Hian
Chief Executive Officer
28 December 2011
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