OUE Commercial to buy OUE Hospitality for S$1.37b

OUE Commercial to buy OUE Hospitality for S$1.37b

OUE Commercial Real Estate Investment Trust said on Monday (Apr 8) it would buy OUE Hospitality Trust in a cash-and-stock deal worth S$1.37 billion (US$1.01 billion), creating one of Singapore’s largest REITs.

Under the deal, OUE Commercial will issue 1.3583 new shares for every OUE Hospitality share, and pay S$0.04075 per share in cash. The total deal value is a premium of 1.6 per cent to OUE Hospitality’s last close.

The combined REIT will have total assets of about S$6.8 billion and will trade under OUE Commercial on the Singapore Exchange, the companies said in a joint statement.

The deal will “significantly enhance our visibility within the S-REITs universe and increase our relevance to a wider investor base,” said Tan Shu Lin, chief executive officer of OUE Commercial REIT Management Pte Ltd, the manager for OUE Commercial Real Estate Investment Trust.

The manager owns a 4.79 per cent stake in OUE Commercial Real Estate Investment Trust, according to Refinitiv Eikon data.

The deal follows a wave of mergers in Singapore’s crowded mid-cap real estate investment trusts, that just about a year ago saw ESR-REIT buying rival Viva Industrial Trust in a deal valued at S$936.7 million.
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OUE Group, which refers to OUE Ltd and its related corporations, will have a 48.3 per cent stake in the combined company, the statement said.

OUE Ltd currently owns a 32 per cent stake in OUE Hospitality Trust, Refinitiv Eikon data showed.

Citigroup, Credit Suisse and Oversea-Chinese Banking Corp are the financial advisers to OUE Commercial, while BofA Merrill Lynch is advising OUE Hospitality.

Source: Channel NewAsia – 8 Apr 2019

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