OUE - Proposed divestment of stake in One Raffles Place

OUE announced that it plans to acquire the stake in One Raffles Place currently held by the Kuwait Investment Office and together with its own inject the interest into OUE Commercial Trust for between S$1,025m and S$1,139m.

Following the transaction, OUE Commercial Trust will hold between 61.16% and 67.95% of One Raffles Place.

Under the structure of the deal, OUE will first acquire between 25% and 33.33% of OUB Centre Limited from the Kuwait Investment Office, based on a value of S$1,740m (S$2,481psf NLA) for One Raffles Place plus S$11.7m in foreign exchange allowances. OUE will then inject the consolidated stake into OUE Commercial Trust for between S$1,025 and S$1,139m.

Technical Analysis
Daily Chart
Due to OUE Commercial Trust being a subsidiary of OUE, OUE will not book a gain on the disposal. Based on pro-forma estimates, the transaction would result in a 2ct dilution to FY14 NAV, and EPS. We maintain our target price and recommendation pending management’s briefing Thursday morning. (Read Report)

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Source : Deutsche Bank Markets Research

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