SINGAPORE (Reuters) - Singapore's Oversea-Chinese Banking Corporation (OCBC) and its insurance arm said they are in exclusive talks with a company controlled by Thai billionaire Charoen Sirivadhanabhakdi to sell their stake in United Engineers.
OCBC and related companies own around 36 per cent of United Engineers, valuing their combined stake at about US$514 million (S$642 million) at the stock's current price. News of the possible deal first broke last week.
A potential sale would also trigger a takeover offer for United Engineers, which has a market value of about US$1.4 billion. Under Singapore rules, a company that acquires a stake of 30 per cent in a listed firm must make a mandatory offer for the remaining shares.
OCBC and Great Eastern Holdings said on Wednesday the talks with TCC Top Enterprise, controlled by Charoen and his wife, are at a preliminary stage and the exclusivity agreement will last for six weeks.
OCBC's announcement comes a day after United Engineers said its subsidiary WBL Corporation was selling its luxury car business to StarChase Motorsports (Singapore) for S$455 million.
Shares of United Engineers have risen by more than a fifth since last week. The stock rose as much as 2.5 per cent in morning trade, before paring gains to trade up 1.1 per cent, while the broader Singapore market was up 0.4 per cent.