The article discusses Ong Beng Seng's upcoming departure as managing director of Hotel Properties Limited (HPL) due to legal issues and health concerns. It argues that he should sell his significant stake (direct and deemed interest totaling around 60%) in the company.
Ong Beng Seng holds a substantial share of HPL, alongside Hong Kong tycoon Peter Woo. The company's shares are currently undervalued, and its net asset value (NAV) does not reflect the potential upside from redeveloping key properties on Orchard Road.
The article suggests that selling Ong Beng Seng's and Woo's shares would be beneficial for both them and minority shareholders. This would allow a new controlling shareholder with the necessary financial strength and expertise to take advantage of opportunities like the redevelopment of HPL's Orchard Road properties.
The redevelopment project presents substantial benefits but also significant risks. The article proposes several potential suitors for HPL's shares, including companies like Hongkong Land, Mandarin Oriental Hotel Group, Allgreen Properties, Shangri-La Asia, Pontiac Land, City Developments Limited, CapitaLand Group, and Mapletree Investments. These companies possess capabilities across office, retail, residential, and hospitality segments and could potentially drive further growth for HPL.
The author concludes that finding a new controlling shareholder is compelling for both Ong Beng Seng and HPL's minority shareholders.