The Marina Mandarin Singapore and parts of the Marina Square complex are changing hands for S$675.3 million, under a deal last Friday involving firms linked to tycoon Wee Cho Yaw.
United Industrial Corp (UIC) is buying out Finnegan Investments and Mackmoor, as well as mainboard-listed OUE. The whole Marina Square mall will then be owned jointly by UIC and parent UOL Group.
UIC is coughing up that sum in cash to raise its subsidiary’s interest in Marina Centre Holdings – which has interests in the Marina Square retail and commercial complex, including a half-stake in the Jardine-linked Mandarin Oriental – and Aquamarina Hotel, the Marina Mandarin’s holding company.
The group will then have a direct interest of 77.34 per cent in Marina Centre Holdings and 75 per cent in Aquamarina Hotel, with the rest to be held by UOL.
UIC president and chief executive Lim Hock San noted in a statement that the full control of the shopping centre and hotel offers “the opportunity to capitalise on the Marina Centre precinct’s growth potential, consistent with our long-term investment strategy”.
The company will fund the purchases in a mix of internal resources and bank loans, UIC said in a statement of its own on the Singapore Exchange website.
The shareholding consolidation will see OUE completely divest its minority interests in the Marina Square firms for S$390 million in all – a price tag that OUE said in a bourse filing was reached after negotiations on an arm’s length and willing seller, willing buyer basis.
The OUE unit that now manages the Marina Mandarin has also agreed to scrap its hotel operating agreement by Dec 31. Liam Wee Sin, group chief executive of UOL, told the press that “this will also give us an opportunity to rebrand and rename the 575-room hotel”.
He added, in a reference to the recent government drive to freshen up the downtown area, that UOL and UIC “will jointly explore asset enhancement opportunities to unlock value for the various assets, including possibility of tapping into the incentive scheme introduced in the latest Master Plan 2019”.
Assuming that the deals went through on Jan 1, 2018, UIC’s pro forma earnings per share would have gone up from 21.9 Singapore cents to 37.3 Singapore cents, while UOL’s would have risen from 51.49 Singapore cents to 51.92 Singapore cents, according to the companies.
Meanwhile, OUE said that it does not expect the transactions to have a material impact on its net tangible asset value, but added that it is eyeing an increase in earnings per share of S$0.15 for the year to Dec 31. It last reported a full-year earnings per share of 1.11 Singapore cents.
Mr Wee, the chairman of UOL, is a substantial shareholder and director of UIC. United Overseas Bank, which Mr Wee’s father founded, sold its majority stake in OUE to the Riady family’s Lippo Group in 2006.