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UOL Group could become one of the biggest owners of commercial properties in Singapore after it has agreed to swap shares with Haw Par Corporation for the latter’s stock in United Industrial Corporation (UIC), revealed an SGX filing on Thursday (22 June).
Under the deal, UOL has a call option, while Haw Par has a put option for the UIC shares. A call option is a right to buy something at an agreed price at a particular date, while a put option is a right to sell.
Upon exercise of either options, UOL will issue 27,272,727 new ordinary shares to Haw Par in exchange for 60 million shares in UIC owned by the latter.
“This is based on an exchange ratio of 2.20, taking into account historical volume-weighted average share prices and net asset values and net tangible asset values as at 31 March 2017,” it said.
Upon completion of the transaction, UOL’s stake in UIC will rise from 44.71 percent to around 48.94 percent. As long as its shareholding does not surpass 49 percent, the Securities Industry Council of Singapore has waived UOL’s obligation to make a mandatory general offer for UIC.
“This is in line with UOL’s objective of consolidating its interest in UIC, with a view to achieving statutory control in UIC in the future,” it explained.
UIC’s core business is real estate development and investment. It was incorporated here in 1963 and listed on the Singapore Exchange (SGX) in 1969. Following its purchase of a majority stake in Singapore Land 1990, it now owns a portfolio of 2.5 million sq ft of office space and one million sq ft of retail premises in Singapore, including those in the Central Business District. It also has overseas assets in China and United Kingdom.
Prior to the announcement, the selling and buying of UIC, UOL and Haw Par shares were stopped, with their last trading prices at S$3.28, S$7.68 and S$11.31 respectively.
The transaction still requires shareholder and regulatory approvals, and all conditions must be fulfilled by the long-stop date of 31 October 2017.
This article was edited by Denise Djong.
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