Frasers Property will take its Singapore-listed hospitality arm, Frasers Hospitality Trust, private in a deal valuing the REIT at S$1.35 billion ($970 million).
Frasers Property has announced the proposed privatisation of Frasers Hospitality Trust(FHT) through the acquisition of all of the issued stapled securities of FHT held by the stapled securityholders of FHT other than the stapled securities held by TCC Group Investments by way of a trust scheme of arrangement.
Under the scheme, the offeror is proposing to acquire stapled securities held by scheme stapled security holders at S$0.70 in cash per scheme stapled security.
Frasers Property(FPL) said the scheme consideration of S$0.70 in cash per scheme stapled security represents a premium of 43.8% and 16.7% over the 12-month VWAP and recent analyst consensus target price respectively.
FHT’s portfolio includes 14 assets in prime locations in nine key cities in Asia, Australia and Europe, with a combined appraised value of approximately S$2 billion as at 30 September 2021.
Eu Chin Fen, Chief Executive Officer of the FHT Managers said: “The FHT Board and Managers have remained committed in delivering sustainable, long-term value to the stapled securityholders. Following our proactive strategic review to unlock value for our stapled securityholders and having considered the long-term challenges facing FHT, we believe that the proposed Trust scheme is the best option and represents a credible opportunity for our Stapled Securityholders to realise their investments at an attractive valuation.”
Loo Choo Leong, Group Chief Financial Officer, FPL commented: “We concur with FHT Managers’ board decision, following their strategic review, that their privatisation by FPL Group will provide the best course of action to optimise value for stapled securityholders. FPL Group’s long-term strategy is centred on leveraging our synergistic multi-asset class capabilities to create value. Hospitality remains one of our core businesses. This transaction will allow FPL Group to increase its investment in hospitality assets at locations that we are already familiar with. As with all assets in our investment portfolio, FPL Group will leverage our deep understanding of FHT’s assets and adopt a rigorous and disciplined approach to drive performance.”
“We have put forward an offer for FHT which also safeguards the interests of FPL’s shareholders. The arm’s length offer was arrived at after taking into consideration the financial and business effects of the privatisation to FPL Group, both over the short and long term, in addition to a number of FHT financial reference points,” Mr Loo added.
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