Pan Pacific Hotel / UOL / Wee Stable of Companies

Pan Pacific Hotel / UOL / Wee Stable of Companies: According to Bloomberg sources, UOL Group, which is controlled by Singapore banking tycoon, Wee Cho Yaw, is planning to take Pan Pacific Hotels private. Both UOL and Pan Pacific were halted from trading this morning, pending the release of an announcement. As entities belonging to Wee’s UOL and UOB already own 81.6% and 8% of total outstanding shares of Pan Pacific Hotels (market cap at $1.4b), it would take very little for UOL to attempt a potential privatization on Pan Pacific Hotels, if the reports are true. What could be more interesting is whether UOL would spin off Pan Pacific Hotels as a hospitality Reit at a later stage. While there has been no official announcement, we do not rule out investor interest spilling over to the Wee family’s stable of companies, which includes Haw Par, UIC and Singapore Land, over a possible restructuring theme surrounding the unwinding of the group’s various cross-holdings. Separately, the latest news could also stir renewed speculation about the potential Reit listings of hospitality assets by OUE and SPH. We caution however that no official word has been released by SGX on UOL and Pan Pacific, although sources from Bloomberg reveal that a UOL board meeting will be held this afternoon to approve the transaction.