UOL Group, a Singaporean Real Estate Developer, will be buying over Haw Par Corporation’s stake in United Industrial Corporation (UIC), another property developer and landlord, via a share swap.
This came after days of speculation following the trading halts of three companies linked to There was talk that the veteran banker Wee Cho Yaw, who is linked to UOL, might be restructuring his empire of companies, and a privatisation of UIC could be in the works. .
The transaction allows UOL to gain an additional significant stake in UIC which would not otherwise be easily available due to the lack of liquidity in UIC.
An increased stake in UIC gives UOL access to UIC’s commercial property portfolio, eg Singapore Land Tower and Marina Square in Singapore. Both UOL and UIC have property interests across the residential, office, retail and hospitality segments in Singapore, China and the United Kingdom. The transaction also allows both groups to collaborate on joint acquisitions of land banks and office and retail investments.
The domestic housing market is bottoming out, consolidating its holdings in UIC will help to boost UOL’s local residential exposure through UIC’s condominium projects.
Following the transaction, UOL will account for UIC as a subsidiary. UOL already has sufficient representation on the board of UIC. Thus there is a lesser incentive to cough out more cash, while allowing UOL can take UIC into its fold in a way that allows it to consolidate its numbers and its position, so that its perceived position as a developer will increase further.
The deal is subject to shareholder and regulatory approvals by Oct 2017.