ST Engineering’s 11th-hour bid to lure Cubic Corp from its original suitor has been rebuffed.

The board of Cubic has decided to accept a joint US$75 offer from Veritas Capital and Evergreen Coast Capital.

ST Engineering on March 24 made a US$76 per share bid for Cubic, trumping Veritas and Evergreen’s original US$70 bid. ST Engineering’s bid values Cubic at US$2.4 billion. 

If the deal goes through, it would have been the local defence and engineering conglomerate’s largest-ever M&A deal. 

San Diego-based Cubic provides mobility solutions for public transport networks, and also communication systems for the military.

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ST Engineering had wanted to acquire Cubic to further its smart mobility growth strategy.

On March 30, ST Engineering revised the offer to US$78 per share but Cubic chose to overlook the extra US$3.

Cubic maintains that its board gave “due consideration” to ST Engineering’s revised bid of US$78.

“In making its decision, the Board carefully assessed the relative benefits and risks of the proposals from both Veritas and Evergreen and ST Engineering.

“The Board determined that, based on the superior certainty and anticipated timing of closing the existing transaction with Veritas and Evergreen, the revised proposal from Veritas and Evergreen was in the best interests of all Cubic’s shareholders,” the company says, adding that it has “ceased engagement” with ST Engineering.

ST Engineering’s bid got to clear additional hurdles including certain anti-trust and foreign direct investment approvals by the Committee on Foreign Investment in the United States (CFIUS).

When it first put forward its bid, ST Engineering notes that it has a track record of successfully obtaining CFIUS approvals for all 11 of its past acquisitions in the US.

To stave off potential sensitivities, ST Engineering has partnered with affiliates of US asset manager Blackstone to acquire Cubic’s Mission & Performance Solutions (CMPS) defence business immediately following the acquisition of Cubic by ST Engineering.

"We appreciate the engagement of the Cubic Board and management team throughout this process," says ST Engineering's group president and CEO Vincent Chong.

"ST Engineering is well positioned for further value creation and will continue to execute on the many other opportunities we have to be a key Smart City solutions provider on the global stage. This offer demonstrated our steadfast focus in seeking opportunities for sustainable global growth, and we will continue to maintain a disciplined approach as we pursue our strategic objectives,” he adds.

ST Engineering shares closed March 31 at $3.89, down 0.26%.