{"id":125234,"date":"2022-02-10T12:30:55","date_gmt":"2022-02-10T12:30:55","guid":{"rendered":"https:\/\/fin2me.com\/?p=125234"},"modified":"2022-02-10T12:30:55","modified_gmt":"2022-02-10T12:30:55","slug":"exclusive-activist-shareholder-quarz-opposes-terms-of-3-billion-singapore-reit-merger","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/exclusive-activist-shareholder-quarz-opposes-terms-of-3-billion-singapore-reit-merger\/","title":{"rendered":"Exclusive-Activist shareholder Quarz opposes terms of $3 billion Singapore REIT merger"},"content":{"rendered":"

SINGAPORE (Reuters) – Activist investor Quarz Capital Management said it is opposed to the terms of a proposed S$4.2 billion ($3.1 billion) merger of two Temasek-linked Singapore real estate investment trusts, saying the target firm was significantly undervalued.<\/p>

FILE PHOTO: A Mapletree logo is pictured in its office in Singapore March 4, 2013. REUTERS\/Edgar Su<\/figcaption>

It is urging Mapletree North Asia Commercial Trust (MNACT) to negotiate an improved offer from Mapletree Commercial Trust (MCT), according to a Feb. 9 open letter reviewed by Reuters.<\/p>\n

Quarz, which has previously been successful in blocking a Singapore REIT deal, says it and its affiliates hold stakes that rank them among the top 10 unitholders of MNACT.<\/p>\n

\u201cWe note that Quarz acknowledges the deal rationale…and sees value in MNACT,\u201d the manager of MCT said in a response to Reuters, but did not elaborate. It said the \u201cmerits\u201d of the proposal were made in its joint announcement with MNACT.<\/p>\n

An external spokesperson for MNACT said the company had no immediate comment on Reuters queries.<\/p>\n

On Thursday, MNACT\u2019s units were down 1.8% before the Reuters story and ended up 0.9% on the day at S$1.12. This marked the first time the units traded above MCT\u2019s offer price of S$1.11 since Jan. 3 when markets resumed trading after the proposed deal was announced on Dec 31.<\/p>\n

Singapore state investor Temasek declined to comment to a Reuters query. Its Mapletree Investments Pte Ltd, a global real estate conglomerate, is the single largest unitholder in both real estate investment trusts (REITs), owning 32.6% of MCT and 38.1% of MNACT as of Dec. 29.<\/p>\n

MCT had announced plans to buy MNACT, seeking to create the seventh-largest REIT in Asia with an expected market valuation of about S$10.5 billion.<\/p>\n

MNACT\u2019s main portfolio includes one commercial property in Hong Kong and two in China, while MCT is a Singapore-focused REIT.<\/p>\n

\u201cWe have received a substantial number of positive responses from MNACT unitholders who are institutional investors, family offices and retail investors since the open letter and are looking to step up our engagement with unitholders through further publications,\u201d Jan Moermann, chief investment officer at Quarz, said in a response to Reuters.<\/p>\n

Quarz, which is run by Moermann, a former Swiss banker, said in the letter that it supports the deal rationale but objects to the merger ratio and price.<\/p>\n

\u201cWe agree that the offer is value destructive to unitholders and significantly undervalues MNACT,\u201d Moermann and Havard Chi, Quarz\u2019s Singapore-based research head, said in the letter.<\/p>\n

MCT offered to acquire all units of MNACT in exchange for MCT units, or a combination of both cash and MCT units that gave the target\u2019s unitholders S$1.1949 per unit.<\/p>\n

This represented a 7.6% premium to MNACT\u2019s Dec. 27 closing price of S$1.11 and was based on MCT\u2019s unitprice of S$2. The companies said the offer was in line with MNACT\u2019s net asset value (NAV) per unit.<\/p>\n

Since then, MCT\u2019s units have fallen 8% to S$1.84 as of Thursday\u2019s close.<\/p>\n

Quarz argued in the letter that the offer price represented one of the \u201chighest discounts to net asset value in the 20-year history of the Singapore REIT market with multiple takeovers and mergers.\u201d<\/p>\n

\u201cMNACT\u2019s board and management should initiate a transparent and robust process to sell the assets above NAV of S$1.23 instead of recommending the suboptimal offer of S$1.08-S$1.10 from MCT ,\u201d Quarz said.<\/p>\n

It added it was confident MNACT would stage a strong recovery from the second half of 2022, citing rising global COVID-19 vaccination rates.<\/p>\n

Singapore\u2019s REIT market is dominated by retail investors who are attracted to the high dividends paid by trusts as the firms are mandated to pay out 90% of their rental income. Founded in 2011, Quarz has publicly campaigned against about a dozen Singapore-listed firms.<\/p>\n

It mustered support to block a merger in 2020 between two Singapore REITs, whose managers are owned by a unit of Asian logistics giant ESR Cayman Ltd, marking a rare victory for activist funds in the city-state.<\/p>\n

($1 = 1.3425 Singapore dollars)<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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