Minority Shareholders Push for Value Unlock at United Overseas Insurance: Call for Distribution of Haw Par Shares and Independent Adviser
In a bold move to maximize shareholder value, a group of minority shareholders of United Overseas Insurance (UOI) have proposed two pivotal resolutions to be discussed at the insurer’s upcoming annual general meeting (AGM). These proposals aim to distribute UOI’s substantial holding of 4.27 million shares in healthcare conglomerate Haw Par Corporation to UOI shareholders, along with the appointment of an independent financial adviser (IFA).
Key Proponents and Rationale
The movement is led by independent investor Ong Chin Woo, representing about 4.5 per cent of UOI’s total shares. Ong, known for his earlier activism at Great Eastern Holdings, argues that UOI’s strong financial ratios demonstrate its capacity to return excess capital without affecting growth. In FY2023, UOI reported a shareholders’ fund to total assets ratio of 70.4 per cent and a capital adequacy ratio of 415 per cent, significantly above industry averages.
The group compared this distribution strategy to a hypothetical special dividend of S$0.67 per share, finding it a more advantageous option that would enhance shareholder value without compromising UOI’s financial stability or growth prospects.
UOI is proposing a final dividend of S$0.085 per share and a special dividend of S$0.06 per share for FY2024. However, the minority shareholders believe the proposed distributions do not fully reflect UOI’s strong financial position and capital adequacy.
Strategic Implications and Next Steps
UOI and Haw Par are part of a group of companies controlled by the Wee family behind United Overseas Bank (UOB). UOB has a 58 per cent interest in UOI. The resolutions highlight growing shareholder activism and governance scrutiny within family-controlled conglomerates.
The proposals will be discussed at UOI’s upcoming AGM, with significant implications for minority shareholders and corporate governance practices.
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