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OUE's failed attempt at acquiring F&N is a 'shame': analyst

 

But here are 3 positive things about the incident.

According to CIMB, with the F&N saga now behind, investors’ focus should shift to the quality of OUE’s assets, which remains unchanged. The group is a Singapore pure play and has a unique exposure to prime assets in four segments – office, hotel, retail and residential.

In terms of location, CIMB believes OUE’s portfolio remains one of the best in class. 

Here's more from CIMB:

We expect its valuation discount to narrow as investors begin to once again appreciate the quality of its assets.

The failure to acquire F&N is a shame as it would have lifted the group to large-cap status in the sector, in our view. However, we see a few positive takeaways from this saga 1) OUE is serious about growing its asset base, 2) it is not shy about making bold moves and 3) it has the financial discipline to walk away from deals if pricing gets too high.

We expect OUE to remain on the lookout for acquisitions to enhance its property portfolio and potentially recycle some existing assets in the process.

So far, management’s track record in asset acquisitions has been good, with additions such as OUE Bayfront, Crowne Plaza and DBS Towers seeing substantial revaluation uplifts in recent years.



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