Overseas Union Enterprise

[winston]

vested

Investment Actions?

Reported revenue and PBT ex other gains form 78% and 73% of our FY12 estimates respectively, largely in-line with our expectations.

We keep our estimates and fair value unchanged at $2.83.

Maintain Accumulate.

Source: Phillips

http://www.remisiers.org/cms_images/res ... 121108.pdf

[winston]

vested

OUE consortium makes S$13.1b offer for F&N By Joyce Hooi

PROPERTY group Overseas Union Enterprise (OUE) is leading a consortium in a S$13.1 billion rival bid for Fraser and Neave (F&N), it said on Thursday night.

The consortium is offering S$9.08 per share, 20 cents higher than Thai tycoon Charoen Sirivadhanabhakdi's offer of S$8.88 per share.

F&N's second-largest shareholder Kirin Holdings Company which holds about 14.8 per cent of F&N, has irrevocably undertaken to accept the OUE consortium's offer, subject to certain conditions.

Source: Business Times

[winston]

vested

UPDATE 2-OUE-led group, Thais battle for control of Singapore's F&N

* OUE consortium launches S$13.1 bln bid
* OUE group offers S$9.08 a share vs Thai offer of S$8.88
* OUE group's offer in middle of F&N advisor's range
* F&N shares close at S$9.13 on Thursday

By Eveline Danubrata SINGAPORE, Nov 15 (Reuters) - A consortium led by Overseas Union Enterprise Ltd launched a S$13.1 billion ($10.7 billion) bid for Fraser and Neave Ltd (F&N) , trumping a takeover offer from Thailand's third-richest man for the Singapore conglomerate.

The consortium's counter bid sets the stage for a showdown between it and the Thais as it seeks to unlock value in the Singapore conglomerate, which owns a property portfolio worth more than S$8 billion, as well as a range of other businesses including popular soft drinks in Singapore and Malaysia.

The consortium is offering S$9.08 per share for F&N, OUE said in a statement on Thursday, beating the Thai offer of S$8.88 a share.

The new offer, made at a discount to F&N's last traded price of S$9.13, values the company in the middle of the S$11.9 billion-16.1 billion range estimated by F&N's independent financial adviser, JP Morgan.

"F&N is a Pan-Asian consumer group with strong standing in property, F and B (food and beverages), publishing and printing industries.

Its property portfolio would be highly complementary to OUE's existing property portfolio," said Stephen Riady, executive chairman of OUE, in the statement.

"Combining both will further strengthen OUE as a leading property player in Singapore and expand our footprint in Singapore and regionally," he added.

Riady is the chairman of the Hong Kong-listed Lippo Ltd <0226.HK>, which is in turn part of the Lippo Group. He is also the son of Mochtar Riady, the founder of Lippo Group.

Lippo Ltd, through its subsidiaries, has a majority stake in OUE, according to its 2011 annual report.

To bolster its chances of success, OUE has secured conditional support from Japan's Kirin Holdings Co Ltd <2503.T>, F&N's second-biggest shareholder with a stake of around 14.8 percent, OUE said.

Kirin will offer to buy F&N's food and beverage business for S$2.7 billion if the OUE group's bid is successful, the statement said. Kirin was not listed as part of the consortium in the statement.

The OUE-led consortium includes certain investment funds and accounts managed by Farallon Capital Management, L.L.C. and Noonday Global Management Ltd.

Credit Suisse, Bank of America Merrill Lynch and CIMB are the financial advisors to the group.

SHOWDOWN LOOMS Jit Soon Lim, an analyst at Nomura, said the latest move by the OUE group is "very likely" to pressure the Thais to raise their offer.

If recent history is any guide, Thai billionaire Charoen Sirivadhanabhakdi is likely to put up a strong fight. Earlier this year, Charoen forced Dutch brewer Heineken NV to raise its offer to get control of Asia Pacific Breweries Ltd , the maker of the popular Tiger Beer.

Charoen, through TCC Assets Ltd and Thai Beverage PCL , made a $7.2 billion bid in September to buy shares of F&N that he did not already own, valuing the entire Singapore group at around S$12.8 billion.

The Thai group is F&N's biggest shareholder with a 33.6 percent stake, and can acquire another 2.8 percent from shareholders who accepted its offer. The Thai offer is conditional on the group obtaining majority control of F&N.

The Thai consortium has twice extended its offer from the original Oct. 29 deadline. The latest closing date is Nov. 22.

Source: Reuters

[winston]

vested

Overseas Union Enterprise

Valuation catch-up; expect more recycling moves
OUTPERFORM - Maintained
S$3.03 - Tgt. S$3.53

--------------------------------------------------------------------------------

With fears of OUE overpaying for F&N now removed, its share price which has lagged behind the sector should catch up.

The key takeaway from this failed M&A is that OUE is serious about growing its asset base but with financial discipline.

We expect more recycling moves.

We lower our RNAV and cut FY12-14 core EPS by 7-10% for lower prices for Twin Peaks.

But our target price is raised slightly for
1) compressed cap rates for its office assets and
2) a tighter 20% discount to RNAV (prev. 25%) as we benchmark to market averages.

We maintain our Outperform call given its attractive 31% discount to RNAV, with potential asset recycling being the catalyst.

Source: CIMB

http://www.remisiers.org/cms_images/res ... 13cimb.pdf

[winston]

vested

The key takeaway from the OUE results (in-line) briefing is the plan for a S$4b hospitality REIT towards the later part of the year.

Better picture is likely to emerge in two months’ time once approvals for the conversion of one residential tower in Twin Peaks and one office block in DBS Towers into serviced residences have been obtained.

Management is looking for expansion opportunities in Singapore, the US and China (tier-3 cities) and evaluating several mega sized deals post the failed FNN bid.

Office leasing momentum at newly completed assets showed signs of pick-up while the hotel segment remained steady.

Maintain BUY with a raised target price of S$3.36 (from S$3.30) factoring in the higher valuations for its hospitality assets.

The stock is trading at a steep 20% discount to its book value (10-year average - 1.1x P/B) and a P/RNAV of 0.7x.

Source: UOBKH

[winston]

Overseas Union Enterprise: Grand Plans Still Afoot

Mkt Cap USD2.1b

Despite not being successful in its attempted acquisition of a major consumer/property conglomerate in Singapore recently, OUE still has grand plans waiting in the wings.

For one, OUE intends to REIT its hospitality assets in the coming months. If only Mandarin Orchard Singapore and Mandarin Gallery are
REITed, OUE will probably be looking at the market to raise ~SGD1bn with a portfolio size of SGD1.8bn.

However, it is also in talks with authorities to convert one tower of Twin Peaks and DBS Tower One into serviced apartments, which can
then be combined into the hospitality REIT.

If these assets are also REITed, the equity fund raising could be almost doubled to SGD1.9bn.

Source: Kim Eng

[winston]

vested

OUE buys tallest building in California for US$367.5M By Joyce Hooi

OVERSEAS Union Enterprise Limited (OUE) is buying the tallest building in California, the US Bank Tower, and some related properties for US$367.5 million (S$459.4 million), the group said on Monday.

Standing at 1,018 feet, the US Bank Tower has 72 levels of office space and six levels of underground parking. It occupies an area of about 1.4 million square feet.

As part of the acquisition, OUE is also buying the accompanying Maguire Gardens and a car park facility in downtown Los Angeles.

"OUE intends to leverage on its strengths in leasing and asset repositioning to increase occupancy and net operating income yield on the asset," the group said.


Source: Business Times

[winston]

vested

Time: 4:38PM
Exchange: SGX
Stock: OUE Ltd(LJ3)
Signal: Resistance - Breakout with High Volume
Last Done: $2.91

Source: UOBKH

[winston]

not vested

Time: 11:07AM
Exchange: SGX
Stock: OUE Ltd(LJ3)
Signal: Bullish MACD Crossover
Last Done: $2.88

Source: UOBKH

[winston]

Overseas Union Enterprises, NOT RATED S$2.94 , Bloomberg: OUE SP Return *: 2
Risk: Moderate

Plans to unlock value
Potential Target * : 12-Month S$ 3.16 (10% upside)

• Exposure largely to Singapore prime real estate
• Core earnings to continue growing while assets undergo rejuvenation; proposed hotel REIT to unlock hidden value
• Fair Value of $3.16, pegged at a 25% discount to RNAV

Source: DBS