TODAY'S HEADLINE

SALE IN THE OFFING FOR MANDARIN HOTEL AND GALLERY?  
A sale could be in the o'ng for the landmark Mandarin Orchard Singapore and the adjoining Mandarin Gallery which were valued at $1.18 billion and $520 million at the end of last year.

Owner Overseas Union Enterprise (OUE) is said to have been receiving interest from potential buyers particularly for the hotel for some  time now and has maintained that it will sell the property if it receives a price too good to refuse.

Now, market talk is that OUE has given exclusivity to a potential buyer to perform due diligence. Some sources point to a US property fund manager ' possibly Pramerica  ' teaming up with a Middle Eastern player, which some suggest could be Abu Dhabi Investment Authority.

In July, a fund linked to Pramerica Real Estate Investors (Asia) sold a half stake in Nex mall here next to Serangoon MRT Station for $825 million.

Pramerica Asia is the real estate investment management arm of Prudential Financial. The deal valued the mall at $1.65 billion, or about $2,679 per square foot (psf) based on the current net lettable area.
However, there have also been suggestions that Saudi Prince Alwaleed's Kingdom Holdings has looked at the Mandarin Orchard hotel. Earlier this year, Toronto'based hotel chain Fairmont Ra'es Hotels International, in which Kingdom has a stake, completed the sale of the historic Ra'es Hotel on Singapore's Beach Road to the Qatar National Hotels Company.

Mandarin Orchard's $1.18 billion valuation in OUE's books works out to around $1.12 million per key for the 1,051'room property. If a transaction materialises at this price or higher, it would be a record for the Singapore hotel market.

In our view, such a turn of events is in line with what investors could expect from the US Fed's latest announcement of unlimited quantitative easing. Money will 'ow from USD to physical assets, and in this case Singapore's properties could be attractive investments. We expect OUE (S$2.62, UNRATED), and other hotel property counters, such as Hotel Properties (S$2.84, UNRATED) and City Developments (S$11.64, BUY)  to be in focus today.

NEWS BUZZ
Olam International (S$2.08) 
Acquires Northern Co'ee in Zambia for US$6.15m
Olam International has won a bid for a full stake in Zambia's Northern Co'ee Corporation Ltd (NCCL) for US$6.15mil. Olam said that it will commit a further US$40mil as capital expenditure and pre'operative expenditure to fully develop 2,000 hectares of Arabica co'ee plantation over the next 've years. The 'rst 300 hectares are expected to be planted in FY2013. Northern Co'ee's estate is expected to yield 4,500 tonnes of Arabica co'ee beans by FY2021 at steady'state.

Ezra Holdings (S$1.18) 
Launches S$ perpetual securities to raise $150m
Ezra Holdings has launched and priced its 'rst Singapore dollar denominated subordinated perpetual securities to raise $150mil. This issuance is the second o'ering under Ezra's US$500 million multicurrency debt issuance programme established on Aug 28, 2012. The securities will bear an initial 'xed distribution rate of 8.75% per annum for the 'rst three years. The distribution rate will be subject to reset every three years and includes a one'time step'up from and including the 'rst reset date, Sept 18, 2015 or it may also choose to redeem in whole the securities on or a''er the third anniversary of the issuance.

CWT (S$1.24) 
Buys LN Metals for US$12.3m
CWT's commodity supply chain management business arm, MRI Trading AG, has entered into a share agreement to fully acquire LN Metals International Limited for US$12.3mil. No material impact on the 'nancial year ending Dec 31, 2012, is expected.

Parkson Retail Asia (S$1.55) 
Raises shareholding in Sri Lankan fashion retailer Odel
Parkson Retail Asia has acquired a further 2.36% of the issued and paid up share capital of Sri Lankan fashion retailer Odel through its mandatory o'er. The 3.42mil shares it obtained brought its shareholding in Odel to 44.55%, or 64.58mil shares, from 42.19% prior to the o'er which ran from Aug 21 to Sept 11.

DBS Group Holdings (S$14.45) 
Private bank to grow Greater China assets  
The private banking unit of DBS Group Holdings Ltd plans to increase assets under management in Greater China to 20% a year for the next three years as wealthy Chinese clients invest abroad. Assets under management at DBS's private bank increased to $52bil at the end of June, driven by cross'selling of products between the corporate and private bank and an increase in assets from clients with $1.5mil to $5mil of investable assets, Ms Tan said , who runs the Singapore'based lender's private banking operations in mainland China, Hong Kong, Macau and Taiwan.
Source: The Business Times

Source: AmFraser