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.
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