OUE shares remain flat after firm says it is buying stake in Gemdale Properties

SINGAPORE - Real estate developer and operator OUE's share price was unchanged on thin trading volume on Monday following news on Sunday that it had agreed to buy a 22.97 per cent stake in Hong Kong-listed real estate developer and operator Gemdale Properties and Investment Corporation Limited (GPI).

OUE's subsidiary, OUE Lippo, had entered into a conditional subscription agreement with GPI to subscribe for 2.9 billion new ordinary shares at an issue price of 52 HK cents per share, a total of about HK$1.51 billion ($256.4 million).

This represents 13.9 per cent of OUE's market capitalisation of approximately $1.85 billion, OUE said in a statement to the Singapore Exchange on Sunday.

The issue price is a discount of about 16.1 per cent to GPI's net tangible asset value of 62 HK cents per share as at June 30, OUE also said.

But OUE also said that it is paying a premium of about 18.7 per cent to the volume-weighted average price of approximately 43.82 HK cents for each share in the capital of GPI, based on trades done on the Hong Kong Stock Exchange on Dec 24, the market day preceding the signing of the deal.

Meanwhile, GPI's share price edged up a cent to 44 HK cents on hefty volume of 13.2 million units at about noon.

GPI, formerly Frasers Property (China), invests, develops and manages residential, commercial and business park projects in Greater China. As at June 30, GPI has total land bank of approximately 4.07 million sqm in nine cities in Greater China.

As at noon, OUE shares stood at $2.03 on turnover of 74,000 units.