Singapore's Wheelock Buys 10% Of SC Global For S$112M

DJ Singapore's Wheelock Buys 10% Of SC Global For S$112M


SINGAPORE (Dow Jones)--Wheelock Properties Singapore Ltd. (M35.SG) said Friday it bought a 10% stake in luxury property developer SC Global Developments Ltd. (S72.SG) for S$112 million.

The 18.682 million shares were purchased from Roveron Pte. Ltd. for S$6 each, Wheelock said in a statement. SC Global's shares closed Friday flat at S$6.45.

"This acquisition is intended to be for long-term investment in a well managed and respected Singapore property company. The purchase consideration will be financed by internal funds," Wheelock said.

A very clear sign that there is tremendous upside in prime residential property. CEO David Lawrence is a very shrewd businessman.

Published June 23, 2007

Wheelock buys 10% stake in SC Global

$112.1m deal gives it exposure to local firms which get to hold land longer

By KALPANA RASHIWALA


WHEELOCK Properties (Singapore) continues to invest in other 'stylish developers' - this time, it has bought a 10 per cent stake in SC Global Developments. The stake was sold by SC Global chairman and chief executive officer Simon Cheong's Roveron Pte Ltd at $6 per share or $112.1 million. The counter ended unchanged at $6.45 yesterday.

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A few good men: (from left) Wheelock CEO David Lawrence is banking on SC Global chairman and CEO Simon Cheong and HPL MD Ong Beng Seng

Yesterday's announcement comes after Mr Cheong earlier this week exercised 23 million SC Global warrants for $35 million. Mr Cheong's divestment of 18.68 million SC Global shares to Wheelock leaves him with a stake of about 51 per cent in the seven-year-old upscale residential developer.

Wheelock Properties CEO David Lawrence likened the group's latest investment in SC Global to its investment in March last year in Hotel Properties Ltd (HPL). Wheelock bought the 21 per cent stake in HPL from GuocoLand for $1.80 per share or a total sum of $171.4 million. Based on HPL's closing price of $6.15 yesterday, the value of that stake has gone up to $585.5 million.

'It's a bit like when we bought into HPL,' Mr Lawrence said in a telephone interview yesterday evening. 'We are looking for good, well-managed companies with a sense of style, a good brand name. That's what we like to invest in . . . and Simon's done very well and when the opportunity came to take a stake, we did. We are really investing in the people, like Ong Beng Seng (HPL's managing director) and Simon Cheong.

'So the main reason is the opportunity to invest in good people running good companies and it's quite difficult to do that at the moment because we can't find sizeable stakes in good companies . . . We have quite a bit to do (ourselves) as it is already.

'So rather than me busting my guts and overworking myself, it's good to have these guys to do some of the work for us!'

A further reason behind Wheelock's strategy of investing in local developers like SC Global and HPL is that it allows Wheelock - which as a foreign company is not allowed to hold on to land for long periods here - to gain exposure to firms that are allowed to do so, Mr Lawrence explains.

Asked if Wheelock was on the prowl for more such investments in Singapore, Mr Lawrence replied: 'I would love to but A, there aren't many people around like Ong Beng Seng or Simon Cheong and they are both great guys who've built good brands and good companies, and B, nobody wants to sell . . .'

Market observers say that an established upscale developer like Wheelock taking a stake in SC Global, is a resounding endorsement of its strategy.

Mr Lawrence also described Mr Cheong as having done a 'fantastic job, building a brand name and company in the last few years'. 'We like that and we want to invest in him, and 10 per cent is as much as we could get.'

There are no plans for now for Wheelock to embark on joint ventures with either HPL or SC Global, although the possibility remains if it makes commercial sense, Mr Lawrence reckons.

'We are not an interfering shareholder. We are not interested in taking over these companies. We're just interested in taking an investment. We don't want board seats but (just want to) let them get on with (the business). Both HPL and SC Global have good managements and good independent boards of directors.'

June 23, 2007

Wheelock snaps up 10% of rival SC Global for $112m

By Fiona Chan, Property Reporter


DEVELOPER Wheelock Properties has taken a stake in competitor SC Global, more than a year after it bought into another property firm, Hotel Properties (HPL).

Wheelock said yesterday that it has paid $112.1 million for 10 per cent of SC Global, a high-end boutique developer.

This works out to $6 per share, a discount of about 7.5 per cent to SC Global's last traded share price of $6.45 yesterday.

The stake was sold by Roveron, one of SC Global chairman Simon Cheong's private investment firms.

Wheelock chief executive David Lawrence was not available for comment, but the firm said in a statement that the acquisition 'is intended to be for long-term investment in a well-managed and respected Singapore property company'.

Property analysts said the purchase bodes well for SC Global, as Wheelock is known to have a good eye for investments.

It reaped more than $400 million from its acquisition of a 21 per cent stake in HPL in March last year, for example.

Wheelock paid $171.4 million, or $1.80 per share at the time. The counter has since surged to $6.15, making Wheelock's stake now worth about $585.6 million.

'Wheelock has always illustrated an eye for the market in terms of buying land,' said one analyst.

'Their investment in HPL has also turned out very well, so this purchase could be good for SC Global, given that Wheelock could see further upside for the company.'

SC Global shares have more than doubled since the beginning of the year, from $2.60 to $6.45.

Industry experts also said the acquisition may lead to tie-ups between Wheelock and SC Global in developing sites, as both have experience in high-end developments and own land in the exclusive enclave of Ardmore Park.

Wheelock bought Ardmore Point and Habitat One in Ardmore Park last year, while SC Global picked up nearby The Ardmore last weekend.

However, a veteran market player added that Wheelock will 'probably be a more passive investor' in SC Global, following the model it has taken with the HPL stake.

'There was speculation that Wheelock would tie up with HPL when it bought the stake last year, but so far it has just sat on the investment,' he said.

Wheelock's buy of the SC Global stake may simply be a way for it to strengthen its exposure to the booming market, said the analyst.

'It's very hard to buy sites right now, and one way to gain leverage on the sector is to buy into other property companies,' he said.

'Blocks of stocks like this one are also hard to come by in this current climate, so it's no surprise that Wheelock snapped it up.'

Wheelock will fund the acquisition through internal funds.

The move is not expected to have a material impact on the company's current financial year.

Wheelock shares added two cents yesterday to close at $3.40.


THUMBS UP

Analysts say the deal bodes well for SC Global, as Wheelock is known to have a good eye for investments.