OUE lifts stake in OUE C-Reit to 65%

PROPERTY group OUE Limited has inked a deal to raise its stake in OUE Commercial Reit to 64.98 per cent, it said in a Singapore Exchange filing on Tuesday.

But it appears to be buying the extra units at above market price.

Its wholly owned unit, Clifford Development, has agreed to pay S$165.97 million in cash to buy about 203.15 million units in OUE C-Reit from Gordon Tang, OUE said, adding that the purchase price was at a discount of about 14 per cent to the net tangible asset value per unit of S$0.95 as at Dec 31, 2015.

However, the purchase price works out to about $0.817 per unit which was above the closing price of S$0.645 for OUE C-Reit units on Tuesday.

The 203.15 million units Mr Tang is selling to OUE make up roughly 15.8 per cent of the nearly 1.29 billion units outstanding in the Reit as at Tuesday, going by Bloomberg figures.

OUE did not say in its statement whether Mr Tang was selling his entire stake in OUE C-Reit, but said that the total acquisition sum had taken into account "various factors such as returns, existing assets and financial position of OUE C-Reit".

Mr Tang, a Chinese tycoon, was a cornerstone investor in OUE C-Reit's initial public offering.