Shareholders of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) have approved a S$4.22 billion ($3.07 billion) merger, which creates the Singapore exchange’s third largest REIT, after sponsor Mapletree Investments sweetened the deal with an all-cash payout option.
During an extraordinary general meeting held Monday, the implementation of the scheme garnered consent from 91.67 percent of all votes cast by MCT shareholders and 99.03 percent of the votes from MNACT shareholders, according to ajoint same-date news releasefrom the respective managers of the trusts.
MCT will acquire all of MNACT’s issued and paid-up units under the scheme,paving the way for the creationof Mapletree Pan Asia Commercial Trust (MPACT), which is expected to become theseventh largest REIT in Asia, and ranking only behind CapitaLand Integrated Commercial Trust and Ascendas REIT on the SGX. The merged entity will have S$17.1 billion in assets under management and a portfolio with 11 million square feet (over 1 million square metres) of net lettable area, an average occupancy of 97.2 percent and weighted average lease expiry of 2.5 years.
“The enlarged financial muscles of MPACT will enable us to undertake capital recycling opportunities, take on value-enhancing asset enhancement and development initiatives, and pursue larger acquisitions in Asia’s key gateway markets,” said Sharon Lim, CEO of Mapletree Commercial Trust Management. She added that “with a diversified and high quality portfolio across Singapore, Hong Kong SAR, China, Japan and South Korea, of which best-in-class assets constitute approximately 67 percent of the merged portfolio, we believe we can deliver.”
On 21 March, MCT attempted to allay some concerns regarding the scheme andrevised its offerto include an all-cash option of S$1.1949 per unit for shareholders of its target.
The cash-only consideration became the default for the proposal, but the options to receive 0.5963 consideration units at the issue price of S$2.0039 for every unit held, or a cash-and-scrip consideration comprising S$0.1912 in cash and S$0.5009 consideration units at the same issue price, were kept on the table.
In the latest joint announcement, the REITs noted that once shareholders elect which option they prefer to receive their consideration, MCT’s manager may undertake a non-renounceable preferential offering of up to 1.09 billion units at S$2.0039 apiece to raise $2.2 billion. In support of the scheme, Mapletree Investments, the Temasek Holdings-backed sponsor of the merging REITs, committed to subscribing to all the units that may be offered and also volunteered for a six-month lock-up of its unitholdings in MPACT.
Moving Ahead
Anchored by a high-quality and diversified commercial portfolio, MPACT will be a proxy to key gateway markets across Asia, according to MCT and MNACT. Through the enlarged entity, both REITs are expecting to pursue further growth and deliver sustainable value to their shareholders.
Upon its creation, MPACT will have footprints in five markets across Asia where its 18 diversified assets are situated. It will have a portfolio that is 44 percent retail, 35 percent office and 21 percent business parks.$MAPLETREE INDUSTRIAL TRUST(ME8U.SI)$
Comments