Ramada Hotel is in the background, sited in Zhongshan Park along Balestier Road. Hotel and park were developed by Hiap Hoe and SuperBowl. NextInsight file photoHIAP HOE has launched a pre-conditional general offer for Superbowl Holdings with a cash offer of SGD0.75/share, representing a 15% premium over the last traded price.
Both companies are currently majority-owned by the founding Teo family and the deal constitutes an interested party transaction subject to approval by independent shareholders of Hiap Hoe.
Superbowl’s key property assets include:
1) a 50% stake in Zhongshan Park, an integrated hotel-cum-commercial complex along Balestier Road with attributable value of SGD351m,
2) a portfolio of strata-titled retail properties across 5 shopping malls worth some SGD110m,
3) a 40% stake in the completed high-end residential project Treasures on Balmoral.
We estimate an RNAV of SGD410m or SGD1.26/share for Superbowl.
The offer from Hiap Hoe thus priced Superbowl at a steep discount of 40% to RNAV.
The combined Hiap Hoe-Superbowl entity, meanwhile, will have SGD800m of investment properties and SGD600m of residential inventory with RNAV of ~SGD1bn, raising its profile in the listed property space league.
Goh Han Peng, analyst, OSK-DMG. We favour the combination of the two companies, which will bring the largest asset within the group, the SGD702m Zhongshan Park complex under a single corporate entity, as well as save on dual-listing expenses should Hiap Hoe succeed in delisting Superbowl.Assuming a successful closure, we estimate a 22% accretion to Hiap Hoe’s RNAV, from SGD1.40/share to SGD1.71/share.
We apply a wider discount of 45% to RNAV given the possibility of equity fund-raising by Hiap Hoe post-acquisition to bring down its gearing, and derive a TP of SGD0.94. BUY maintained.
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