UOL increases stake in UIC

In exchange for the issuance of 27.3m shares.

UOL announced an option agreement with Haw Par Corporation Ltd under which it will issue approximately 27.3m new shares in exchange for higher stakes in UIC.

According to OCBC Investment Research, UOL’s interest in UIC will increase from 44.71% to 48.94% upon completion of the transaction, which will transfer Haw Par’s 60m stakes to UOL.

"We understand that the SIC has waived UOL’s obligation to make a mandatory general offer for UIC as long as UOL does not increase its shareholding in UIC across the 49% threshold," the brokerage firm noted.

It added, "In our view, the exchange ratio is fair and, as UOL has indicated, this transaction will enable the group to acquire a significant minority interest in UIC which is otherwise not available given the lack of trading liquidity. This is in line with the group’s objective to consolidating interest in UIC with a view to achieving statutory control in the future."