Falling Knife of the Week: OUE Limited

knifeThis week sees real estate outfit, OUE Limited (SGX: LJ3), falling 5.5% so far to close at S$2.25 on Thursday.

OUE Limited owns brand-name hotel such as Crowne Plaza Changi Airport and properties such as OUE Bayfront, One Raffles Place and Twin Peaks. It spun off its two assets – Mandarin Orchard Hotel and Mandarin Gallery – into a real estate investment trust, OUE Hospitality Trust (SGX: SK7), or OUE H-Trust, in July last year.

On 18th March 2014, the company announced that it is part of a consortium that has been granted preliminary approval to develop the first internationally branded integrated entertainment resort in South Korea. The other companies in the consortium include Lippo Limited and Caesars Entertainment Corporation. OUE is 68% owned by Lippo Limited.

Two days later, OUE made known the outcome of the dividend-in-specie exercise. This is following the announcement at the end of February where it made public that it would be giving one OUE H-Trust stapled security for every six OUE shares held by a shareholder. Following the exercise, OUE will retain 33-35% of OUE H-Trust, down from 45% prior to the exercise.

OUE is currently trading at 0.7 times its historical book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.