OUE Offers S$222.2 Million to Privatise Healthcare Arm OUE Healthcare

OUE Ltd has proposed to privatise its healthcare subsidiary OUE Healthcare at an implied equity value of S$222.2 million, offering S$0.050 per share for the minority stake it does not already own. The offer represents a 28.2 per cent premium to the last traded price and aims to delist the Catalist-l

Singapore’s OUE Ltd has offered to privatise OUE Healthcare (OUEH) at an implied equity value of S$222.2 million ($175 million), seeking full control of a regional platform spanning healthcare operations and property investments across five Asian markets.

Under the proposal announced Monday, OUE, the SGX-listed developer controlled by the Riady family, would pay S$0.050 in cash for each OUEH share it does not already own. A wholly owned vehicle of OUE holds 89.68 per cent of Catalist-listed OUEH, leaving a 10.32 per cent minority stake whose acquisition would cost S$22.9 million.

The offer price represents a 28.2 per cent premium to OUEH’s last transacted price of S$0.039 on Friday. If the scheme takes effect, OUEH would become a wholly owned subsidiary and be delisted from the Singapore Exchange.

OUEH shares jumped 23 per cent to S$0.048 on Monday after the deal was announced and were unchanged on Tuesday, leaving the stock 4 per cent below the offer price. “The offeror believes that privatising OUEH will provide the offeror and OUEH’s management with greater flexibility to manage and grow the existing businesses and pursue longer-term strategies, without being constrained by the shorter-term expectations of the public market,” the companies said in a release.

OUEH sits at the centre of the group’s healthcare property platform, with a deemed interest of 43.4 per cent in hospital-focused First REIT and a 40 per cent stake in First REIT’s manager. OUE directly owns the manager’s remaining 60 per cent. SGX-listed First REIT in April agreed to sell eight Indonesian hospitals and three non-core assets for S$471.5 million, while securing put options to divest six remaining hospitals for S$294.8 million. Exercising the options would lift total proceeds to S$766 million and complete the trust’s exit from Indonesia.

The first tranche won unitholder approval in June, but First REIT said Monday that completion is now expected by October because buyer Siloam International Hospitals plans to seek shareholder approval in late September. The put-option exercise period was extended to 31 March 2027. A full exit would leave First REIT with 14 nursing homes in Japan and three in Singapore as the OUE-sponsored trust pivots towards developed markets. The disposal is projected to cut aggregate leverage to 16.7 per cent and save S$18.8 million in annual interest costs, creating capacity for acquisitions.

OUEH is simultaneously expanding in China through its 50:50 healthcare venture with state-owned China Merchants Group. The partnership operates a specialist women’s and children’s hospital in Changshu and opened the flagship CM Lippo Prince Bay Hospital in Shenzhen in July.

OUEH’s half-year results showed revenue holding flat at S$75.2 million as the company swung to a S$1.7 million loss from a S$16.7 million profit a year earlier, chiefly after losses at the joint venture hospitals helped widen its share of losses from equity-accounted investees.

For minority shareholders, the offer provides an opportunity to exit a stock that has traded well below the proposed price. The consideration stands 37.5 per cent above OUEH’s one-month volume-weighted average price, 36.1 per cent above the three-month average and 42.1 per cent above the six-month benchmark. OUEH’s investor presentation shows that average daily trading volume equalled just 0.05 per cent of outstanding shares during the past year, compared with 0.22 per cent for Straits Times Index constituents. The healthcare company recorded no trades on 16 market days during the period.

The proposed price is only 2.5 per cent above OUEH’s unaudited net asset value of S$0.0488 per share as of June, while OUE needs just S$22.9 million to acquire the thinly traded public float of a company valued at S$222.2 million.

OUEH will appoint an independent financial advisor to assess the scheme, which requires approval from a majority in number of voting scheme shareholders representing at least 75 per cent of the shares voted. The timetable indicates a mid-November shareholder meeting, completion by year-end and delisting in early January 2027.