OUE to buy Oxley execs' IHC stakes

The Oxley executives who wrestled control of medical property developer International Healthway Corp (IHC) last month in a shareholder coup are selling their stakes to another real estate firm.

Developer OUE, controlled by Indonesia's powerful Riady family, will pay 10.6 cents a share in a deal signed yesterday with Oxley boss Ching Chiat Kwong, deputy chief Eric Low and two others.

The shares amount to 35.77 per cent of IHC. The agreement will be sealed by married deals, after which OUE will emerge with a 57.6 per cent stake in IHC.

OUE also launched a cash offer yesterday for all the remaining IHC stock that it does not own, offering 10.6 cents a share.

The offer represents a 1.9 per cent premium to the last transacted price of 10.4 cents, before trading was halted on Wednesday.

IHC shares have risen by 112 per cent, from 4.9 cents at the start of the year.

OUE said that it intends to keep IHC listed but may take it private if it gets control of more than 90 per cent of the medical company.

It first invested in IHC in January, when it scooped up a 12.5 per cent stake in an off-market deal - the same day that Oxley executives led the ouster of IHC's previous board at a shareholder meeting.

On Feb 8, OUE raised its stake to 21.83 per cent.

Oxley's Mr Low, who accumulated 118.1 million shares in 2015 - some for as low as 8.5 cents - and pushed hardest for the ouster, told The Straits Times that he was pleased with OUE's offer, though it had taken him by surprise.

Mr Low said: "We fought hard to make sure that all the shareholders would benefit from this exercise. OUE has the expertise to run a hospital, and it can easily turn IHC around, compared with us. IHC will be in good hands."

Oxley earlier proposed extending a $50 million loan to IHC, convertible into shares, but that deal is likely to be called off with OUE taking the reins.

Catalist-listed IHC owns 12 nursing homes in Japan and two hospitals in China, and is developing an integrated medical centre in Malaysia.

OUE executive chairman Stephen Riady said: "This acquisition allows us to expand into the new sector of healthcare real estate, which is a strategic fit to our existing asset portfolio."

Quarz portfolio manager Havard Chi, whose firm started accumulating IHC shares in recent months, said: "We believe that OUE's offer provides fair value to all shareholders in the short and mid term, and intend to tender our shares.

"IHC probably has more upside, but it could take more than one to two years to unlock the value."

A version of this article appeared in the print edition of The Straits Times on February 17, 2017, with the headline 'OUE to buy Oxley execs' IHC stakes'. Print Edition | Subscribe