UOL's earnings dropped 15%

Blame it on weak hotel segment.

According to OCBC, UOL’s 1Q13 PATMI decreased 15% YoY to S$71.7m mostly due to a weak contribution from its hotel segment (listed hotel subsidiary PPHG saw its 1Q13 PATMI dip 45% to S$9.5m). 

1Q earnings now make up 19% of their full-year forecast, which OCBC judges to be generally within expectations and is tracking marginally below due to lumpy progress
recognition at development projects.

Here's more from OCBC:

The group has made a cash offer of S$2.55 per share to delist PPHG (Pan Pacific Hotels Group), conditional on the shareholder approval.

The offer price represents a 9% premium over PPHG’s last transacted price of S$2.34 and gives shareholders, in UOL’s view, a reasonable exit alternative which may not be available given low trading liquidity and free float (UOL owns 81.57% and UOB 7.99%).

We see this as a sensible move which would consolidate the group’s hotel assets at a fairly reasonable price, given our estimated RNAV of S$2.80 for PPHG.

That said, from our discussions with management, it appears unlikely that material operating changes, i.e., a major re-structuring or REIT listing, are in store.