by winston » Mon Apr 06, 2015 12:52 pm
not vested
United Industrial Corporation (UIC) – It may happen this year, next year or some point in the future. But we think it will happen.
In recent years, UOL Group has steadily tightened its grip on UIC, amassing a 44% stake in UIC. Haw Par, which is affiliated with the Wee family, holds another 5%.
We think UOL is likely to eventually raise its stake in UIC above 50% through further open market purchases and/or buying over Haw Par’s 5% stake. This will then trigger a general offer for UIC and if the price is enticing enough, it may even persuade the other major shareholder of UIC, JG Summit, to part with its 37% stake.
UOL will get to consolidate UIC’s SGD7bn of property assets, many of them investment grade commercial properties and hotels, into its books.
This will swell UOL’s asset base to over SGD10bn, making the Wee family’s property flagship one of the largest real estate company in the region.
UIC currently trades at 0.8x P/BV.
Source: RHB
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