Perennial CEO 'not disappointed' offer for UEL did not go through
It was never consortium's intent to gain full ownership of the company, he says
Singapore
PERENNIAL Real Estate Holdings chief executive Pua Seck Guan said he is "not disappointed" that the Yanlord-Perennial consortium's offer for United Engineers (UEL) did not go through, as it was never its intent to gain full ownership of the target company to begin with.
The consortium had no choice but to make an offer; the mandatory general offer was triggered by its purchase of OCBC's approximately one-third stake in UEL in July this year.
"It was the condition for the sale. Typically, people do not want to be initiated to do a general offer because it would be a more costly exercise, so they try to buy below 30 per cent. But the seller's condition for the sale is that the buyer has to buy (its full stake)."
The consortium had always maintained that it planned to keep UEL listed. "Anything from 30 to 90 per cent is what we were prepared to do. So we were not disappointed," Mr Pua said.
At the end of the offer, the consortium garnered shares and valid acceptances amounting to 34.8 per cent of UEL's ordinary shares.
Mr Pua said the consortium saw real potential to unlock value from UEL's assets, especially given that the previous shareholder had stopped "polishing its gems" as it was already looking for an exit, a buyer to offload its stake to.
UEL has residential and mixed- use projects in China, and a portfolio of office buildings, business parks, malls, hospitality assets and mixed-use developments in Singapore.
On the appointment of himself and Yanlord Land chairman and CEO Zhong Sheng Jian as new directors on UEL's board, Mr Pua said: "We know the challenges in this company. We have to come in here, roll up our sleeves and work out the assets over the years, then we can create value ...
"We find that (UEL's) assets have some inherent value, but need some work ... but we have to be patient to work on the plan to unlock the value slowly, both for the China and Singapore assets."
The board appointments also came as a natural move as both property companies became major shareholders in UEL. At the same time, most of the existing directors also resigned as "they have been waiting for years to step down", he said.
OCBC had started discussions in 2014 to sell its UEL holding to Thai billionaire Charoen Sirivadhanabhakdi, but talks lapsed the next year without a deal.
Asked how he reads Oxley Holdings' move to accumulate shares over the offer period, he said: "It shows that he has confidence in us and is paying a premium over us to own a stake without any control."
UEL's stock rose one cent to finish at S$2.71 on Friday.
