Billionaire Riady Family Said to Seek United Engineers Stake (3)

(Bloomberg) -- OUE Ltd., backed by the billionaire Riady family, plans to pursue a stake in Singapore property group United Engineers Ltd., a person with knowledge of the matter said.

Singapore-listed OUE is interested in bidding for shares held by Oversea-Chinese Banking Corp. and its affiliates, said the person, who asked not to be identified as the information is private. The formal sale process hasn’t started yet and other parties could also express interest, another person familiar with the matter said.

United Engineers shares surged as much as 6.3 percent to S$2.69, the biggest intraday increase since March 18, before paring its gain to 3.1 percent as of 12:21 p.m. in Singapore. The shares have advanced 31 percent this year. OUE slid 2.2 percent.

OUE has been approached in relation to the purchase of United Engineers shares but there are no ongoing discussions and no assurance of any definitive agreement, OUE said in a filing Wednesday with the Singapore stock exchange.

“United Engineers’ hospitality and commercial assets could fit well into OUE’s portfolio, which makes it a very good fit,” said Tata Goeyardi, a director at Religare Capital Markets Pte.

Reviewing Options

OCBC and its insurance arm Great Eastern Holdings Ltd. said last month they were reviewing options for their combined stakes in United Engineers. OCBC, Great Eastern and the bank’s founding Lee family were working with an adviser to gauge interest in the company, people familiar with the matter said at the time.

The Singapore firms and the Lee family own more than 30 percent of United Engineers, the people said last month. Under Singapore rules, buying such a stake would trigger a mandatory takeover offer for United Engineers, which has a $1.2 billion market value. Exclusive talks between OCBC and Charoen Sirivadhanabhakdi, Thailand’s richest person, lapsed last year.

OUE, a property developer, has assets across Asia and the U.S. The real estate company is the sponsor of OUE Hospitality Trust, a hotel REIT, and OUE Commercial Real Estate Investment Trust, an office landlord. OUE is controlled by Lippo Group, the Indonesian conglomerate led by Mochtar Riady. Previously known as Overseas Union Enterprise, OUE is helmed by Riady’s son Stephen.

United Engineers has been selling non-core businesses and assets in recent years, including stakes in property management companies in China, an Indonesian steel fabrication firm and a Singapore wireless broadband provider last year. It sold its U.S. subsidiary Multi-Fineline Electronix Inc. this year.

(Updates with company comment in the fourth paragraph.)

To contact the reporters on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net, Joyce Koh in Singapore at jkoh38@bloomberg.net. To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Ben Scent at bscent@bloomberg.net, Peter Vercoe

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