Perennial Real Estate Holdings has just sold all its shares in United Engineers (UE) to Yanlord Land for zero profit, at a price below market. This is not what companies usually do, unless cash is an issue or confidence has been lost in the investment. The truth may be neither of those things, once you account for the 25.3 per cent gain that Perennial has made by flipping its shares in UE subsidiary WBL Corp over to Yanlord as part of the package. The structure of the deal seems to suggest that the value of WBL has risen by 25.3 per cent while the value of UE has remained flat since mid-2017, when Yanlord and Perennial acquired control of UE from the OCBC group and its founding Lee family. In reality, WBL seems to be priced rather richly, relative to UE. WBL’s net asset value has barely changed since Perennial bought in at S$2.07 apiece in 2017. As at end-2018, its NAV per share was S$2.5947.... Continue Reading