What you need to know about UOL's 81.6%-owned Pan Pacific Hotels

Before it gets fully privatised.

According to Nomura, UOL reported 1QFY13 results on 10 May after the market closed. PATMI of SGD71.7mn (-15%y-y, -85%q-q) met 22% of our full-year forecast of SGD333.3mn. 

Nomura expects more profits from Spottiswoode Residences (98% sold), Katong Regency (100% sold), and Archipelago (100% sold) to be recognised during the rest of FY13F and judge the results to be broadly in line with expectations.

Here's more from Nomura:

That being said, the 1Q result has turned out to be somewhat of a side show because the company announced on the same day the proposed privatisation of its 81.6%-owned subsidiary, Pan Pacific Hotels (Pan Pac; PPAC SP, Not Rated), offering SGD2.55/share in cash for the remaining stock that it does not own.

Pan Pac owns commercial and hotel assets in Singapore, as well as hotels in Malaysia, Vietnam, China, and Australia. In addition, the company manages c.4,600 rooms in hotels mainly in Singapore, Indonesia, China, and North America under the Pan Pacific and Parkroyal brands. Besides UOL’s 81.6% stake, UOB (UOB SP, Buy) owns an 8% stake in Pan Pac.

UOL’s cash offer of SGD2.55/share represents a premium of 9% over Pan Pac’s last traded price of SGD2.34 and a very slight premium over the 12-month high share price of SGD2.54 that was reached in February.