SINGAPORE - Frasers Property is privatising subsidiary Frasers Hospitality Trust (FHT) with an offer of 70 cents per unit.
The offer price represents a premium of 43.8 per cent over the 12-month volume-weighted average price of FHT and is 16.7 per cent over a recent analyst consensus target price.
The offer values FHT at 1.07 times above its net asset value. This is higher than the historical average of FHT's trading value since its listing.
It also exceeds the current trading multiples of other listed Singapore hospitality trusts and other previous S-Reit privatisations.
FHT owns some $2 billion of hospitality assets in key cities in Asia, Australia and Europe.
Both Frasers Property and FHT said the privatisation was being done in view of poor market conditions and challenges faced by the hospitality group following more than two years of the pandemic.
Frasers Property owns 24.23 per cent of FHT.
Both companies, which are listed on the Singapore Exchange, called for trading suspensions last Friday (June 10).
Frasers Property closed at $1.10 last week prior to its trading suspension, while FHT closed at 66 cents.
FHT has jumped by more than 40 per cent this year following declines in the previous two years, giving it a market value of $1.3 billion.
The deal could be completed by the fourth quarter of this year, The Straits Times understands.
