http://www.straitstimes.com/archive/...t-hpl-20140416

Ong Beng Seng in joint bid to buy out HPL

He partners Wheelock to make offer to buy 41.91% stake in hotel firm

Published on Apr 16, 2014 1:28 AM

By Cheryl Ong


LOCAL tycoon Ong Beng Seng has partnered with Wheelock Properties in a bid to buy out his listed property firm Hotel Properties (HPL).

The offer announced yesterday values the firm at about $1.78 billion and follows CapitaLand's move on Monday to launch a buyout of its CapitaMalls Asia unit.

The partnership, 68 Holdings, said in a filing with the Singapore Exchange yesterday that it has offered to buy 41.91 per cent of HPL - or about 214 million shares - at $3.50 apiece in cash from Mr Ong and companies controlled by him, his wife, Ms Christina Fu, Nassim Developments, Mr David Ban Song Long and his wife, Ms Tan Quee Heong.

This triggers a "mandatory conditional takeover", which means 68 Holdings must pay the same amount for the remaining shares in HPL that it does not already own or has agreed to buy.

The firm said Mr Ong, as HPL co-founder, together with Mr Ban and Wheelock Singapore "have been long-term shareholders of HPL and they share a common vision and strategy for (the firm)".

"They have therefore decided to consolidate their shareholdings in HPL so as to be in a position to cooperate and implement their shared objectives for HPL and to enhance value over time."

The partnership is a joint venture between Cuscaden Partners, which holds 60 per cent, and Nassim Developments, which owns the remaining 40 per cent.

Cuscaden Partners is in turn 90 per cent owned by Mr Ong and 10 per cent owned by Mr Ban. Nassim Developments is an indirect wholly owned subsidiary of Hong Kong-based Wheelock Properties, which has a 20.16 per cent stake in HPL.

Yesterday's move comes after much talk of a possible privatisation attempt by Mr Ong.

Maybank Kim Eng analyst Alison Fok noted in a report in April last year: "While we believe it is more likely there would be a redevelopment of (HPL's) prime assets, we do not rule out the possibility of a privatisation or an increase in stake by Mr Ong Beng Seng to cement his position as a majority shareholder to avoid any shareholder fights."

HPL owns and operates hotels such as the Hilton Singapore, Four Seasons Orchard and Concorde Hotel. It has also helped to develop high-end residences like D'Leedon in Leedon Heights and Tomlinson Heights in Orchard Boulevard.

The offer is estimated to be at a discount of 24.9 per cent to its revalued net asset value of about $4.66, and 11.8 per cent higher than HPL's closing price of $3.13 last Friday. HPL suspended trading of its shares on Monday.

The firm also noted that it intends to retain HPL's listing on the SGX mainboard but it may decide to take it private if HPL's free float falls below 10 per cent.

Brokerage firm OSK DMG said in a note: "We think this opportunistic bid is too low given that both HPL owns almost 3ha of prime land in Orchard Road."

HPL shares closed 40 cents up at $3.53, while Wheelock's shares closed seven cents up at $1.815.

[email protected]