IMHO it’s still a win-win deal for both the investors and buyer
Investors get premium to NAV for selling
Buyer get to own asset at bottom cycle at good price
Nobody knows what the future holds
Paragon Reit formerly SPH Reit *Official* (SGX:SK6U)
- Thread starter Sinkie
- Start date
Investors get premium to NAV for selling
Buyer get to own asset at bottom cycle at good price
Nobody knows what the future holds
NAV/share is at the bottom of the real estate cycle.
NAV/share valuation will rise much higher and faster at the peak of real-estate cycle.
Hence retail investors are being taken advantage.
reddevil0728
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can see outcome of the vote. whether retail investors think they are being taken advantage of
jywy2005
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Me too. After so so so many years, hardly ever hit above $1.
Because manager-cum-sponsor does not do share buybacks but issue shares only.
Cuscaden Peak is taking advantage of the REITS investors.
During IPO, Paragon REIT is the exit liquidity for Cuscaden Peak / SPH holdings.
Now, Cuscaden Peak / SPH holdings wants to buy back Paragon REIT undervalued intentionally, so that they can sell it back to retail noobs at much much much higher price in the future. Manager only looks after their own pocket.
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reddevil0728
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Unfortunately no legal recourse
Shion
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Paragon Reit offer is fair and reasonable, says independent financial adviser
https://www.straitstimes.com/busine...reasonable-says-independent-financial-adviser
SINGAPORE - A $2.78 billion offer to privatise the real estate investment trust (Reit) that holds the Paragon mall in Orchard Road has been deemed “fair and reasonable” by an independent assessor.
The Reit’s independent directors are thus recommending that unit holders vote in favour of the deal.
Documents lodged on the Singapore Exchange on March 27 revealed that PrimePartners, the independent financial adviser appointed by Paragon Reit, has concluded after considering the financial terms involved that the offer is fair and reasonable.
The offer to take Paragon Reit private by major shareholder Cuscaden Peak Investments comprises paying unit holders 98 cents per unit in cash. It was first announced on Feb 11.
PrimePartners noted in the documents that the offer price is fair and reasonable as it is higher than the Reit’s value per share after excluding debt, potential fees and cash reserves.
The offer price also represents a premium over the last traded price before the offer was announced, and is higher than the level at which the Reit had been traded over the past two years.
It is also higher than the current market price of similar Singapore retail Reits, as well as the average target price analysts have ascribed to the stock.
Consequently, the Reit’s independent directors are of the view that the offer represents the most attractive and credible option available, and delivers immediate deal certainty by allowing unit holders to fully monetise their investments in cash.
They are recommending that unit holders vote in favour of the deal at an extraordinary general meeting (EGM) on April 22 at 2.30pm. The deadline to submit proxy forms is on April 19.
Cuscaden Peak Investments – formerly Singapore Press Holdings – first proposed on Feb 11 to privatise and delist Paragon Reit by way of a trust scheme of arrangement. It is a subsidiary of Cuscaden Peak, an investment company jointly held by Temasek subsidiaries Mapletree Investments and CLA Real Estate.
Paragon Reit currently owns Paragon mall, which accounts for 72 per cent of the Reit’s value, as well as The Clementi Mall and South Australia’s Westfield Marion Shopping Centre.
If unit holders approve the deal, Cuscaden Peak Investments has said that it plans to renovate and upgrade Paragon mall for between $300 million and $600 million. Changes will be made to the mall’s facade, interior and facilities, with work carried out in phases to avoid the mall’s full closure.
In its pitch to unit holders, Cuscaden Peak Investments said that given the significant amount of capital needed, and weaker investor demand for Reits due to high interest rates and market uncertainties, keeping Paragon Reit listed while undertaking the renovations would not be beneficial to unit holders.
However, it is worth noting that unlike most of its other assets, including The Seletar Mall, Woodleigh Mall and The Rail Mall, which were divested or put up for sale over the past two years, Cuscaden Peak Investments not only retained Paragon mall, but plans to invest heavily to keep it appealing to investors.
This implies that Cuscaden Peak Investments still sees considerable long-term value and returns in Paragon mall. Like-minded investors might want to consider this potential when voting for the deal.
Executives of the Reit noted in February that regardless of whether it is privatised, plans to renovate the mall will take place, as competition from other malls in Orchard Road has been intensifying.
Analysts warn that should the deal fall through, unit holders may need to contend with disruptions to operations at the mall as renovations are carried out over the next few years.
The offer will require amendments to the Paragon Reit Trust Deed, which must be approved by at least 75 per cent of unit holders voting at the EGM.
The offer must also be approved by more than 50 per cent of unit holders, representing at least 75 per cent of the value of units held, at a meeting to approve the scheme after the EGM.
Cuscaden Peak and its subsidiaries, which hold 61.5 per cent of Paragon Reit, will abstain from voting.
Units of Paragon Reit were trading flat at 97 cents on March 27.
Got like 78-79 units from my SPH days.
Tee_bag
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Dont know don't care. I see it as a free way of getting rid of my odd units.ic ic ... i holding 1 lot since IPO
is the offer really fair and reasonable??
reddevil0728
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Shion
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Paragon Reit unit holders give nod to privatisation offer
https://www.straitstimes.com/busine...t-unitholders-give-nod-to-privatisation-offer
SINGAPORE - Unit holders of Paragon Real Estate Investment Trust (Reit) on April 22 approved the scheme resolution proposed by Cuscaden Peak’s Times Properties to take the trust private. Its delisting is expected on June 6, subject to regulatory approval.
During the scheme meeting, 1,000 unit holders, or around 82.8 per cent of those present and voting, agreed to the privatisation offer. This represented about 97.6 per cent of units, well above the 50 per cent required of total voting minority shareholders, as well as the required 75 per cent in value of units.
The scheme resolution was also contingent on the approval of amendments made to the Paragon trust deed. These amendments, which were also voted on during an extraordinary general meeting held the same day, drew 98.8 per cent of support, surpassing the 75 per cent required to push through with it.
Cuscaden Peak and its subsidiaries, which own 61.5 per cent of the Reit’s units, abstained from voting at the meeting.
The last day of trading for the counter is expected to be on or around May 14, followed by its record date on May 23 at 5pm.
Paragon Reit unit holders will receive the scheme consideration of $0.98 a share in cash on or around June 4.
Independent financial adviser (IFA) PrimePartners previously described the privatisation offer of $0.98 per unit as fair and reasonable, and noted that it represented a slight premium of 4.4 per cent over the Reit’s net asset value (NAV) per unit, and a premium of 7.1 per cent over its adjusted NAV per unit.
The IFA said the scheme consideration also represented premiums of more than 10 per cent over the units’ volume-weighted average prices spanning various look-back periods of up to two years.
Cuscaden Peak had made an offer to privatise the trust in February, noting that it had the lowest free floats among its retail Singapore Reit (S-Reit) peers, and had historically experienced low trading liquidity.
Total assets have grown 1.3 times since the Reit’s creation as SPH Reit at its initial public offering in 2013, compared to the average of 2.9 times for other retail S-Reits, Cuscaden added. Its cash offer of $0.98 per unit values the Reit at $2.8 billion.
Still, the manager noted in a bourse filing on April 17 that it had tried to address these issues. For instance, it undertook an equity issuance of $164.5 million in December 2019, along with the acquisition of a 50 per cent interest in an Australian shopping centre, which resulted in an increase of its free float to about 38.5 per cent.
“Recent market conditions, such as the Covid-19 pandemic and the unavailability of assets with accretive returns limited Paragon Reit’s acquisition of quality assets, which may have resulted in the limited increase (in its free float),” said the manager.
The presence of “many long-term unit holders” could be another factor, given that the Reit has been consistently paying annual distributions of over $0.05 since its listing, save for 2020, when the Reit was affected by the pandemic, it added.
The scheme would therefore allow unit holders “to realise their investment in cash at an attractive valuation with no trading costs”, and enable them “to immediately reinvest proceeds into other opportunities”, said Cuscaden and Paragon Reit.
reddevil0728
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did u vote for or against?
reddevil0728
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if u want the money now rather than wait, there's a premium to it lor
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