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Yanlord-led consortium takes 33.5% stake in United Engineers, triggering takeover (Amended)

A CONSORTIUM led by Yanlord Land Group and Perennial Real Estate has acquired a 33.5 per cent stake in United Engineers Limited (UEL) at S$2.60 per share and a 10 per cent stake in WBL Corporation for S$2.07 per share.

It has committed to buy another 19.9 per cent stake in WBL at a later date. The total purchase cost for these stakes is S$729.7 million. 

The move has triggered a mandatory takeover for UEL.

At the offer prices, the consortium is valuing 100 per cent of UEL and 29.9 per cent of WBL at about S$1.83 billion.

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Both Yanlord and Perennial had halted trading of their shares on Singapore Exchange on Wednesday pending the announcement.

The move marks Yanlord's first foray into Singapore real estate market, after its public listing here in June 2006.

Yanlord chairman and CEO Zhong Sheng Jian said: "As a key global financial centre, Singapore's real estate market continues to present a good value proposition for developers such as ourselves seeking to develop stable and recurring revenue streams."

Perennial CEO Pua Seck Guan said the partnership between Perennial and Yanlord brings together "synergistic skillsets and on-ground delivery capabilities, which will facilitate the unlocking of the potential value in United Engineers for all stakeholders".

The consortium intends to maintain the listing status of UEL and will re-evaluate its position should UEL not meet the minimum public float requirement on the closing date of the offers.

In the event that the ordinary share offer for UEL becomes unconditional, this will trigger a "chain offer" for WBL at S$2.07 per share as UEL currently owns 67.6 per cent stake in WBL, which was delisted in February 2014.

Credit Suisse Group has advised OCBC and its insurance unit Great Eastern on the strategic review of their stakes in UEL since September.

Amendment Note: The story earlier mentioned that the S$729.7 million purchase price was for 33.5 per cent stake in UEL and a 10 per cent stake in WBL. It should be for 33.5 per cent of UEL and 29.9 per cent of WBL. The story has been amended to reflect this.

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