OCBC, Great Eastern say talks to sell UEL, WBL stakes in final stages as Perennial, Yanlord call for trading halt

SINGAPORE - Oversea-Chinese Banking Corporation Limited (OCBC) and Great Eastern Holdings are in the final stages of discussions with a shortlisted bidder regarding their combined stakes in property group United Engineers Ltd (UEL) and its subsidiary WBL Corp Ltd, the two companies said jointly in a pre-market exchange filing on Wednesday (July 12).

Though the bidder was not named, Perennial Real Estate Holdings, which said last month that it had submitted an offer, requested for a trading halt on Wednesday morning.

Yanlord Land Group also called for a trading halt before the market opened on Wednesday, but declined to comment on speculation that it may be involved in the bid for UEL.

Bloomberg in a report on Wednesday said a consortium, including Perennial and Yanlord, plans to announce an agreement as soon as Thursday to buy the UEL and WBL stakes. The consortium then plans to make an offer for the rest of UEL, said Bloomberg, quoting unidentified sources.

It said the investor group is moving ahead with the deal after obtaining clarifications from Singapore's takeover council on the procedures for making a simultaneous bid for the two companies.

OCBC Bank, Great Eastern and the bank's founding Lee family, hold a combined 36 per cent stake in UEL, which has a market cap of S$1.8 billion. Under Singapore rules, the buyer of their stake would have to make a mandatory takeover offer for the rest of UEL.

Private equity firm KKR & Co, Malaysian conglomerate Samling Group and Singapore government-owned development group Ascendas-Singbridge, as well as an investment vehicle of Malaysian tycoon Lee Ming Tee, were also shortlisted to make final bids for UEL, Bloomberg reported in February.

OCBC Bank and Great Eastern said that as at the date of its Wednesday announcement, no agreement has yet been entered into with the shortlisted bidder.

"In the event any transaction in respect of their combined stakes in UEL and WBL were to materialise, such transaction is not expected to have a material impact on the earnings of OCBC Bank and Great Eastern," they added.

UEL is one of Singapore's oldest companies, with interests in property, engineering and distribution, technology and manufacturing. In recent years, it has been selling non-core businesses and assets.

Buildings that UEL has developed include its flagship mixed-use project UE BizHub City (formerly known as UE Square), and orchardgateway, the mall and hotel complex. It also owns Rochester Mall and UE Square Shopping Mall, as well as a stake in Seletar Mall.