UOL offers to take over UIC for S$1.20 a share

Mainboard-listed UOL Group has made a takeover bid for United Industrial Corp (UIC).

UOL is paying S$1.20 per share – valuing UIC at S$1.6 billion.

The move comes after UOL’s shareholding in UIC crossed the 30 per cent mark.

Under listing rules, this means it has to make a general offer for the remaining shares.

UOL’s bid for UIC has revived long-time rivalries between United Overseas Bank Chairman Wee Cho Yaw and Philippine typhoon John Gokongwei.

Mr Wee is chairman of UIC, while Mr Gokongwei is its largest shareholder.

In 2005, when Mr Gokongwei tried to buy out UIC, Mr Wee was among the shareholders who rejected the offer.

Under Wednesday’s proposed takeover, UOL will pay S$1.20 for each UIC share that it does not currently own.

That is a 9 per cent premium over UIC’s last traded price of S$1.10 a share.

Some market watchers said the deal is not likely to succeed because the offer price is way below what Mr Gokongwei paid in the past.

Observers said the real value in owning UIC is its 72.4 per cent stake in Singapore Land – the largest office landlord in the country.

SingLand has a portfolio of S$1.6 billion worth of office assets.

It owns a number of key Grade A offices in the central business district, including Singapore Land Tower, SGX Centre 2 and Clifford Centre.

It also owns retail properties like the Marina Square shopping mall.

UOL said if its bid is successful, it will offer to buy the remaining shares of SingLand for S$3.57 a share, or S$406 million.

Analysts see the move as helping UOL expand its current office portfolio.

Shares of UIC, which were suspended from trading, last changed hands at S$1.10.

UOL shares closed down 2.3 per cent at S$2.09 apiece on Wednesday.

Source : Channel NewsAsia – 14 Jan 2009

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