Yanlord Land Group Ltd., the China-focused developer, is partnering with Perennial Real Estate Holdings Ltd. in a bid for century-old Singapore property group United Engineers Ltd., people with knowledge of the matter said.
A consortium including Perennial and Yanlord plans to announce an agreement as soon as Thursday to buy Oversea-Chinese Banking Corp.’s stakes in United Engineers and its WBL Corp. subsidiary, the people said, asking not to be identified because the information is private. It then plans to make an offer for the rest of United Engineers, which has a market value of S$1.73 billion ($1.25 billion), the people said.
The investor group is moving ahead with the deal after obtaining clarifications from Singapore’s takeover council on the procedures for making a simultaneous bid for the two companies, according to the people. Shares of United Engineers, Perennial and Yanlord were halted from Singapore trading Wednesday, pending announcements.
An agreement would cap a years-long push by OCBC to offload its stake in United Engineers, whose properties include Singapore shopping centers like Rochester Mall and the UE BizHub City mixed-used development. The bank started discussions in 2014 to sell the holding to Thai billionaire Charoen Sirivadhanabhakdi, people with knowledge of the matter said at the time, though talks lapsed the next year without a deal.
“Investment in this portfolio allows someone to have a strong, operational platform in the highly competitive and well-capitalized Singapore market,” Priyaranjan Kumar, regional executive director of capital markets at Cushman & Wakefield Inc. in Singapore, said by email Wednesday. “There is in place high quality, defensive cash flow, which can be improved through active asset management.”
Any transaction would add to the $8.8 billion of acquisitions in the city-state’s real estate industry announced over the past 12 months, data compiled by Bloomberg show. OCBC and its insurance unit said Wednesday they are in the final stages of talks with an unidentified bidder for their combined stakes in United Engineers and WBL.
Buying their shareholdings would trigger a mandatory general offer for United Engineers under Singapore takeover rules. Representatives for OCBC, Perennial and United Engineers declined to comment, while a representative for Yanlord didn’t immediately answer a phone call seeking comment.
Yanlord was Singapore’s best-performing major property stock last year with a 31 percent gain, according to data compiled by Bloomberg. The company, which develops high-end residential and commercial projects in China, had $1.9 billion of cash and equivalents at the end of March, the data show.