News Summary
Frasers Property has proposed a second bid to take Frasers Hospitality Trust private, valued at S$1.37 billion. This new offer of S$0.71 per share aims to surpass the 75% shareholder approval benchmark that was missed during their previous attempt. Currently owning over 60% of the trust’s shares, Frasers Property seeks to consolidate its holdings further and enhance its presence in the hospitality sector, which includes a portfolio of hotels across several regions. The dynamics are complicated by TCC Group’s significant stake in the trust.
Singapore – Frasers Property has made a second bid to take its real estate investment trust (REIT), Frasers Hospitality Trust, private, proposing a deal valued at S$1.37 billion (approximately $1.1 billion). This acquisition attempt seeks to secure a greater percentage of shareholder approval than the previous failed effort in June 2022.
The latest offer consists of S$0.71 for each share not already owned by Frasers Property, reflecting a significant increase from the prior offer of S$0.70 per share which ultimately did not garner sufficient support. In that earlier attempt, Frasers managed to obtain only 74.9% of the required 75% shareholder approval.
Frasers Property currently owns over 60% of Frasers Hospitality Trust’s shares, positioning itself strongly for this new venture. The company’s portfolio, which includes 14 hotels and 3,477 rooms, spans across locations in Asia, Australia, and Europe. Key properties within this portfolio comprise the 171-room Park International in London, the 380-room Novotel Melbourne on Collins, and the 593-room ANA Crowne Plaza in Kobe, Japan.
The total appraised value of the Frasers Hospitality portfolio is approximately S$2 billion as of September 30, 2024, which suggests the new buyout offer presents a potential premium for stapled security holders compared to the net asset value. At the moment, Frasers Hospitality REIT is listed on the Singapore Exchange, with its shares currently trading at S$0.68.
Following the initial proposal’s rejection, Frasers Property appears to be more strategic in its second attempt. With interests in managing properties valued at SG$38.9 billion, Frasers has substantial assets, positioning the company effectively in the market.
Another significant player in Frasers Hospitality Trust is Thai investor TCC Group, which holds a 36.7% stake in the REIT. This further complicates the dynamics of the acquisition proposal, as the support of TCC Group may be crucial in the upcoming vote concerning the buyout.
Frasers Hospitality REIT was established and listed on the Singapore Exchange in July 2014 and has been a prominent player in the hospitality market since its inception. The proposed acquisition signals an ongoing trend amongst real estate firms to consolidate their holdings for more streamlined management and potential growth opportunities.
The current bid reflects a larger strategy from Frasers Property to fortify its asset base and simplify its corporate structure by consolidating its holdings under the Frasers Property umbrella. As the market responds to this news, shareholders and analysts will be closely monitoring how this second offer is received compared to the first.
In summary, with a new offer on the table and a larger valuation, Frasers Property aims to secure approval for the buyout of Frasers Hospitality Trust, expanding its influence in the hospitality sector and potentially enhancing returns for its investors.
Deeper Dive: News & Info About This Topic
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