UOL Group (UOL SP) - DBS Research 2017-11-07: UOL Inching Up Its Stake In UIC

UOL Group (UOL SP) - DBS Vickers 2017-11-07: UOL Inching Up Its Stake In UIC UOL GROUP LIMITED U14.SI

UOL Group (UOL SP) - UOL Inching Up Its Stake In UIC

  • UOL bought 110k UIC shares (representing 0.008% in UIC) from open market at S$3.34 per share.
  • While the increase is marginal, Wee Concert Party’s stakes in UIC is inching closer to the 50% mark.
  • Intention remains unclear as UOL had previously requested for whitewash waiver when it acquired UIC shares from Haw Par.
  • Nevertheless, we believe gaining control of UIC at appropriate prices bodes well for UOL.



What’s New 

  • UOL purchased an additional 110k UIC shares (representing 0.008% in UIC) in the open market at S$3.34 per share yesterday.
  • This brings UOL’s shareholding in UIC up marginally from 48.51% to 48.52%. Including the remaining stake held by Haw Par in UIC, the total shareholding owned by the whole group (Wee Concert Party) inches up a little from 49.18% to 49.19%.
  • In Jun17, UOL acquired 60m UIC shares from Haw Par via a share swap. Based on UOL’s last traded price prior to the announcement of the share swap, the implied price of UIC shares was S$3.50 per share (above the price paid for the UIC shares bought in the open market yesterday).
  • While the intention of the Wee Concert Party remains unclear as UOL had previously requested for a whitewash waiver to make a mandatory general offer when the latter acquired the UIC shares from Haw Par, we note that the Wee Concert Party continues to buy small stakes from the market from time to time, inching its stake closer to 50%.
  • Nevertheless, we believe gaining control over the UIC Group at appropriate prices bodes well for UOL / the Wee Concert Party as UOL could unlock a larger portfolio of investment/ development properties held by both UOL and UIC.
  • TP under review. UOL as expected has been one of the front runners in the property developer space. As price has achieved our TP of S$8.73, we put our call and TP under review pending results end this week.




Derek TAN DBS Vickers | Rachel TAN DBS Vickers | http://www.dbsvickers.com/ 2017-11-07
DBS Vickers SGX Stock Analyst Report BUY REVIEW BUY 8.730 Same 8.730



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