SMB United Ltd : Voluntary Conditional Cash Offer For SMB United Limited – Despatch Of Offeree Circular And Press Release

PRESS RELEASE SMB BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS TO REJECT UNSOLICITED BOER OFFER Boer Offer Not Compelling SINGAPORE, 2 December 2011 - SMB United Limited ("SMB") announced that a circular (the "Circular") containing the advice of the independent financial adviser and the recommendations of the Directors on the offer by Boer Power Holdings Limited ("Boer") to acquire SMB (the "Boer Offer") has been or will be despatched to shareholders of SMB today. SMB's Board of Directors, after careful consideration of the terms of the Boer Offer and the advice of its independent financial advisor, has unanimously decided to recommend that shareholders rejectthe unsolicited Boer Offer. The Board agrees with the independent financial adviser that the Boer Offer price does not appear to represent an exit price that would adequately compensate shareholders for the loss of listing status of SMB and the SMB shares (if the privatisation of SMB materialises after the close of the Boer Offer and as intended by Boer). Accordingly, the Board recommends that SMB shareholders not tenderany of their shares to Boer.

Lee Phuan Weng, Chairman of the Board, stated, "SMB's Board of Directors has evaluated Boer's offer and concluded that it does not appear to reflect the value of SMB and its growth profile."
"We recommend SMB shareholders to reject Boer's offer which fails to reflect our current financial position and growth profile," said Lawrence Lee, SMB's Chief Executive Officer. "The Boer Offer price does not appear to reflect any control premium for SMB, does not recognise the contribution of EDMI Limited ("EDMI") as a wholly-owned subsidiary and does not appear to reflect the earnings and growth profile of SMB where EDMI contributed approximately 70% of the SMB Group's earnings before interest and tax and EMDI's revenue grew by 51% compared with the prior year period, based on SMB's third quarter results."
The Board based its recommendation to reject the Boer Offer on a number of reasons, including the following:

1. Advice from the independent financial adviser which took into consideration the prevailing market, economic, strategic and other relevant conditions. 2. Boer's unsolicited offer is not compelling and the offer price does not appear to recognise the contribution of EDMI.

The Boer Offer does not appear to reflect the full contribution of EDMI on a 100% basis following the recent acquisition of the remaining EDMI shares not owned by SMB.
The Boer Offer also does not appear to reflect the earnings and growth profile of SMB where EDMI Limited contributed approximately 70% of the Group's earnings before interest and tax. For the 9 months ended 30 September 2011, EDMI's revenue grew 51% as compared with the same period in the prior year.

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3. SMB has consistently paid out dividends to shareholders over the past 5 financial years.

For each of the past 5 financial years, SMB has consistently declared and paid out net dividends of 1.0 cent to 2.7 cents per SMB share which represent an average net dividend yield of approximately 6.0%, significantly higher than the gross interest income yields from alternative investments such as the Singapore dollar fixed deposits from local commercial banks.

4. The Boer Offer price of S$0.32 per share does not appear to reflect any control premium for SMB. 5. The Boer Offer is rejected by all of SMB's Directors who collectively hold approximately 24.35% of the issued SMB shares.

A copy of the Circular, which sets forth in greater detail the Board's recommendation on the Boer Offer, is being mailed to all SMB shareholders and is also available on SMB's website and at www.sgx.com. The information in this press release is qualified by, and should be read in conjunction with, the more detailed information contained in the Circular. SMB urges shareholders to read the Circular in its entirety. Shareholders who are in any doubt in relation to the Circular or as to the action they should take should consult their stockbroker, bank manager, accountant, solicitor, tax adviser or other professional adviser immediately.
The Directors of SMB (including those who may have delegated detailed supervision of this press release) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this press release are fair and accurate and that no material facts have been omitted from this press release, and they jointly and severally accept responsibility accordingly. Where any information has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors of SMB 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 press release.
Enquiries concerning information in the Circular 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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