Yanlord Nears $1.2 Billion United Engineers OfferBy
Consortium to announce bid of S$2.60/share as soon as Thursday
China-focused developer teams up with Perennial Real Estate
An investor group led by Yanlord Land Group Ltd. is preparing a bid for United Engineers Ltd. valuing the century-old Singapore property company at about $1.2 billion, according to people with knowledge of the matter.
The Yanlord consortium has agreed to buy the United Engineers stakes held by Oversea-Chinese Banking Corp. and its insurance arm, according to the people. It plans to announce an offer of S$2.60 a share for the rest of the company as soon as Thursday, the people said, asking not to be named as the deliberations are private.
China-focused developer Yanlord holds 49 percent of the bidding vehicle, while Singapore landlord Perennial Real Estate Holdings Ltd. accounts for 45 percent and a Chinese investor owns the remainder, the people said. Their offer represents a 7.9 percent premium to the United Engineers closing price on Sept. 26, the day before OCBC announced a strategic review of its stake. It is a 4.1 percent discount to the stock’s last price this week before trading was suspended, pending an announcement.
The deal would cap a years-long push by OCBC to offload its stake in United Engineers, whose properties include Singapore shopping centers like Rochester Mall and the UE BizHub City mixed-used development. Any transaction would add to the $8.8 billion of acquisitions in the city-state’s real estate industry announced over the past 12 months, data compiled by Bloomberg show.
Yanlord’s 5.875 percent 2022 notes fell 0.13 cents on the dollar to 103.9 cents at 4:33 p.m. local time, the biggest drop since July 3, according to Bloomberg-compiled prices.
Credit Suisse Group AG is advising OCBC and insurance unit Great Eastern Holdings Ltd. on a strategic review of their stakes in United Engineers, according to a January exchange filing. A representative for Perennial declined to comment, while representatives for Yanlord and United Engineers didn’t immediately respond to requests for comment. OCBC declined to comment in an emailed statement.
OCBC and Great Eastern have also agreed to initially sell a combined 10 percent stake in closely-held United Engineers unit WBL Corp. to the bidding group at S$2.07 a share, the people said. They will sell a further 19.9 percent stake if the bidding group manages to obtain at least 50 percent of WBL, according to the people.