Mapletree Commercial to make preferential offering to fund new cash-only option for MNACT bid

Mapletree Commercial Trust's VivoCity retail property in Singapore. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree Commercial Trust; Rendy Aryanto/VVS.sgMapletree Commercial Trust's VivoCity retail property in Singapore. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree Commercial Trust; Rendy Aryanto/VVS.sg

 Mapletree Commercial Trust and Mapletree North Asia Commercial Trust (MNACT) have revised their merger bid to include an option for MNACT unitholders to choose to receive S$1.1949 in cash, the two REITs said in a filing to SGX Monday. 

That gives MNACT unitholders three options: cash-only, cash-and-scrip and scrip-only, the filing said.

In late December, the two trusts announced a plan to merge into Mapletree Pan-Asia Commercial Trust in a S$4.22 billion deal, creating one of Asia’s top-10 largest REITs with assets across Singapore, South Korea, China, Hong Kong and Japan.

Under the deal previously announced, which will be a trust scheme of arrangement, unitholders of MNACT had the option to receive S$1.1949 for each unit, which was to be paid by either 0.5963 new MCT unit issued at S$2.0039, or a combination of 0.5009 MCT unit and S$0.1912 in cash.

Units of MCT ended Friday at S$1.89, down from levels over S$2.00 in December when the offer was made, while MNACT closed at S$1.12.

To fund the cash-only option, MCT will make a preferential offering of up to 1.094 billion new units at S$2.0039 a unit to raise up to S$2.2 billion, the filing said. The cash-only option will increase the maximum amount of cash MCT needs to fund the deal to around S$2.6 billion from S$417.3 million under the previous offer, the filing said.

Mapletree Investments, the sponsor of both REITs, has agreed to subscribe for the units, with a six-month lockup period, the REITs said.

The manager of MNACT had requested MCT review the offer to include the alternative cash-only option due to “prevailing market conditions” and feedback from MNACT unitholders, the filing said. Stock market conditions have been volatile in recent months due to Russia’s invasion of Ukraine and expectations of rising interest rates amid increased inflation. 

As of end-March 2021, Mapletree Investments owned and managed S$66.3 billion of properties in the data center, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail sectors. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek Holdings.

 

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