Yanlord-led consortium to acquire stakes in UE, WBL Corp for up to $730 mil

By PC Lee / The Edge Singapore | July 14, 2017 10:18 AM SGT
SINGAPORE (July 13): A group led by Yanlord Land, together with Perennial Real Estate, is making an offer to acquire a 33.5% stake in United Engineers at $2.60 each.
The group has already acquired a 10% stake in WBL Corporation at $2.07 each, and may acquire another 19.9% stake at the same price at a later date, if the offer results in the group owning more than 50% of UE.
Oversea-Chinese Banking Corporation and its insurance group Great Eastern Holdings are among the sellers of the shares.
The total consideration will amount to as much as $729.7 million.
At the offer prices, the offeror is valuing 100% of UEL and 29.9% of WBL at $1.83 billion.
Yanlord owns a 49% stake in the consortium, Perennial and its two sponsors Kuok Khoon Hong and Wilmar International own a 45%, while the remaining 6% is held by Chinese investor Kung Chun Lung.
Founded in 1912, UE is one of Singapore’s pioneer companies and over the years has evolved into a corporation with key business activities in property rental and hospitality, property development, and engineering, distribution and manufacturing.
WBL, a private property group, is a 67.6% subsidiary of UE.
“The proposed transactions will allow Yanlord and Perennial to strengthen their positions in their existing markets and through strategic review of the business and operations of United Engineers, uncover areas of long-term value for all stakeholders,” says the consortium in a filing on Thursday night.
Yanlord and Perennial say their shares of the consideration will be funded from a combination of cash reserves, debt market capital fundraising and external bank financing.
The consortium also intends to maintain the listing status of UE although it will re-evaluate its position should UE not meet the minimum public float requirement on the closing date of the offers.
Credit Suisse Group has advised OCBC and Great Eastern on the strategic review of their stakes in UE since September.
Shares in UE were priced at $2.71 before the trading halt.
This article first appeared on The Edge Singapore