68 Holdings hikes offer price for HPL to $4.05

Just after getting 6.7m more shares.

According to OSK DMG, 68 Holdings, the consortium between Ong Beng Seng and Wheelock Properties, has raised its offer price for HPL from SGD4.00 to SGD4.05 after acquiring an additional 6.7m shares or 1.3% of HPL at the same price.

68 Holdings currently owns 47.47% of HPL, and together with valid acceptances of its offer amounting to 0.96%, controls 48.4% of HPL’s share capital. It is currently just 1.6% shy of the 50% majority stake that it seeks for the offer to turn unconditional.

Here's more from OSK DMG:

It also announced that there will be no further increase in the offer price, in the absence of any competing bids. The offer by 68 Holdings is undoubtedly a vote of confidence on the prospects of HPL by its major shareholders, valuing HPL at over SGD2.1bn.

HPL is asset-rich; it owns and manages 28 hotels and resorts spread across 13 countries, operating under brands such as Four Seasons, Como and Concorde.

In Singapore, the group’s 3 hotels along Orchard Road include the 422-room Hilton Singapore, the 254-room Four Season and Concorde Singapore. Along with adjoining assets such as Forum the Shopping Mall and HPL House, we think the group’s properties and hotels bounded by Cuscaden Road and Orchard Road are ripe for redevelopment given their ageing profile compared to newer malls springing up across Orchard Road.

HPL’s diversified asset base will ensure a continuing stream of recurring income when its Orchard Road assets are eventually put up for re-development. In particular, its resort hotels in the Maldives and Bali are doing brisk businesses from a rising stream of tourists from mainland China.

We expect 68 Holdings to begin unlocking value from its real estate after the takeover offer, and our back-of-envelope calculation suggest a RNAV of SGD6.00-8.00 on a re-development scenario. We recommend investors to get on board with HPL’s major shareholders to ride the next wave of share price rerating.