UEL shares rise on talk of takeover again

UE BizHub City (formerly known as UE Square) is UEL's flagship mixed-use project. UEL is one of Singapore's oldest companies, with interests in property, engineering and distribution, technology and manufacturing.
UE BizHub City (formerly known as UE Square) is UEL's flagship mixed-use project. UEL is one of Singapore's oldest companies, with interests in property, engineering and distribution, technology and manufacturing. PHOTO: NIVASH JOYVIN

OCBC and Great Eastern Holdings hire Credit Suisse to review options for their stakes in the developer

OCBC Bank and its Great Eastern Holdings insurance arm have appointed Credit Suisse to help review options for their combined stakes in United Engineers Ltd (UEL) and its WBL Corp subsidiary.

The announcement came yesterday after shares of developer UEL surged nine cents or 3.5 per cent to $2.66 earlier in the day, drawing a query from the Singapore Exchange before trading was halted.

UEL shares have come into play on takeover speculation in the past. It remains to be seen if and when a buyer will emerge.

Last October, developer OUE, which is backed by the billionaire Riady family, confirmed reports that it had been approached in relation to a share purchase, but said that it was not involved in any talks.

In 2015, share sale talks between OCBC and Thai beer tycoon Charoen Sirivadhanabhakdi fell through after the parties failed to agree on price.

The latest round of speculative buying comes after OCBC and Great Eastern said last September that they were reviewing options for their combined stakes in UEL.


UE BizHub City (formerly known as UE Square) is UEL's flagship mixed-use project. UEL is one of Singapore's oldest companies, with interests in property, engineering and distribution, technology and manufacturing.  PHOTO: NIVASH JOYVIN

OCBC, Great Eastern and the bank's founding Lee family reportedly hold a combined 30 per cent stake in United Engineers, which is valued at about $1.7 billion. The buyer of their stake would have to make a mandatory takeover offer for the rest of UEL under Singapore rules.

"Such strategic review is still ongoing and there is no certainty that the review will result in the completion of any transaction or other options," OCBC and Great Eastern said in a joint statement yesterday.

OCBC, Great Eastern and the bank's founding Lee family reportedly hold a combined 30 per cent stake in United Engineers, which is valued at about $1.7 billion. The buyer of their stake would have to make a mandatory takeover offer for the rest of UEL under Singapore rules.

Their comments came after Bloomberg cited sources as saying that the major shareholders had been sending preliminary financial information on UEL's business to potential bidders since the end of December, with first-round offers due by the end of this month.

At least 10 parties, including regional property developers, private equity firms and real estate funds, have indicated interest, Bloomberg reported.

OCBC and UEL declined to comment on the Bloomberg report.

UEL is one of Singapore's oldest companies, with interests in property, engineering and distribution, technology and manufacturing.

It has been selling non-core businesses and assets in recent years, including its environmental engineering businesses and its stake in Multi-Fineline Electronix, a Nasdaq-listed printed circuit board maker.

Buildings that it has developed include its flagship mixed-use project UE BizHub City (formerly known as UE Square), and orchardgateway, the mall and hotel complex.

A version of this article appeared in the print edition of The Straits Times on January 06, 2017, with the headline 'UEL shares rise on talk of takeover again'. Print Edition | Subscribe