SPH REIT unitholders advised to accept Cuscaden Peak offer

The Paragon Mall at Singapore's Orchard Road shopping belt, shown with Longchamp and Gucci signage, is part of SPH REIT's portfolio. Photo taken in January 2022The Paragon Mall at Singapore's Orchard Road shopping belt, shown with Longchamp and Gucci signage, is part of SPH REIT's portfolio. Photo taken in January 2022

The independent financial advisor (IFA) has advised SPH REIT unitholders to accept Cuscaden Peak’s offer for the REIT, according to the circular filed to SGX Friday.

“We are of the opinion that the financial terms of the offer are fair and reasonable,” the IFA, PrimePartners Corporate Finance, said, according to the circular.

“Based on our opinion, we advise the independent directors to recommend that unitholders accept the offer, unless unitholders are able to obtain a price higher than the offer price on the open market,” the IFA said.

Cuscaden Peak, the consortium which bought Singapore Press Holdings (SPH), set the price for the chain offer for all the units of SPH REIT at S$0.9372 a unit; the offer is conditional on Cuscaden Peak receiving acceptances which would bring its holding to more than 50 percent of SPH REIT’s units.

Units of SPH REIT ended Friday at S$0.945, up 0.53 percent.

The consortium was required to make the offer after the results of shareholders’ choice of consideration for their SPH shares left Cuscaden Peak holding around 47.2 percent of SPH REIT.

In making its recommendation, the IFA noted the offer price is at a 0.6 percent premium over the volume-weighted average price (VWAP) for the three-month period before the chain offer was announced, and that the units’ trading volume has been low. The units have underperformed the Straits Times Index and the iEDGE S-REIT index over the previous two-year period, the IFA said.

However, the IFA also noted the offer price is a discount of 2.3 percent to the VWAP for the one-month period prior to the chain offer announcement.

SPH REIT has a portfolio of five assets across Singapore and Australia. In Singapore, the REIT owns the Paragon mall, The Clementi Mall and The Rail Mall. In Australia, the REIT owns a 50 percent interest in Westfield Marion Shopping Centre in Adelaide, South Australia, and an 85 percent stake in Figtree Grove Shopping Centre in Wollongong, New South Wales.

Who is Cuscaden Peak?

The consortium Cuscaden Peak includes Tiga Stars, a wholly owned subsidiary of tycoon Ong Beng Seng’s Hotel Properties, and Adenium, which is a wholly owned subsidiary of Temasek portfolio company CLA Real Estate Holdings, as well as Mapletree Investments‘ indirect wholly owned subsidiary Mapletree Fortress. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek.

Cuscaden Peak is 40 percent owned by Tiga Stars, 30 percent by Adenium and 30 percent by Mapletree Fortress. Tiga Stars is 70 percent owned by Hotel Properties, with the remainder held by Como Holdings, which is ultimately owned by Ong Beng Seng, who is the controlling shareholder of Singapore-listed Hotel Properties. Adenium is wholly owned by CLA Real Estate Holdings, which is an independently managed portfolio company of Temasek.