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OCBC in talks for possible sale of UEL and WBL stake

Market watchers say the deal could give a boost to OCBC's capital following its US$5 billion (S$6.25 billion) acquisition of Hong Kong's Wing Hang Bank. 

SINGAPORE: OCBC Bank and its insurance unit Great Eastern Holdings are in talks on the possible sale of its combined stake in United Engineers (UEL) and WBL Corporation (WBL).

In a statement on Thursday (Aug 21), OCBC says it has been approached by "a party" that could lead to an offer of shares of UEL and WBL. However, the bank adds that discussions are still in the preliminary stages and that there is no certainty that it may lead to any transaction or agreements.

The statement follows reports that OCBC was in talks with a group linked to Thai billionaire Charoen Sirivadhanabhakdi to sell its stake in property firm UEL. OCBC and its related firms hold a 36 per cent stake in UEL, which has a market value of US$1.2 billion (S$1.5 billion).

If a deal is struck, the Charoen-linked group will have to make a mandatory takeover bid for United Engineers. Under Singapore's takeover rule, a company that acquires a 30 per cent stake in a listed firm must make a mandatory offer for the remaining shares.

Market watchers say the deal could give a boost to OCBC's capital following its US$5 billion (S$6.25 billion) acquisition of Hong Kong's Wing Hang Bank. United Engineers shares jumped 7.4 per cent before trading was halted at the request of the company. 

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