[SINGAPORE] Stapled security prices of Frasers Hospitality Trust (FHT) opened 1.5 per cent higher at S$0.695, a day after Frasers Property proposed to privatise the trust at S$0.71 per stapled security.
However, as at Thursday (May 15) noon, stapled securities of FHT were up 0.7 per cent or S$0.005 at S$0.69.
The offer marks the second attempt by Frasers Property to privatise FHT. The rationale given was the trust’s inability to further improve the distribution and growth in the face of macroeconomic headwinds.
The price of S$0.71 per stapled security reflects a minimum premium of 7 per cent over FHT’s last traded price of S$0.66, before trading was halted on Tuesday. The price implies a 1.11 times, or 11.1 per cent, premium over its net asset value (NAV), and exceeds the implied average premium over NAV of former Singapore real estate investment trust privatisations since 2020 of 1.04 times. This is also just S$0.01 per stapled security higher than the previous offer in September 2022 of S$0.70 per stapled security. That offer failed.
The trading halt was lifted before the market closed on Wednesday. Stapled securities started trading at S$0.69 after the trading halt was lifted, and quickly picked up pace to S$0.695 after a few hours. But it lost all momentum when markets closed, with a closing price of S$0.68 on Wednesday.
In April, the manager of FHT announced that there would be a strategic review to evaluate various options.
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FHT’s price has been running up – even more so after news of the trust’s privatisation offer came out.
A month ago, on Apr 15, stapled securities were trading at S$0.58.
Additionally, the trust also experienced a trading activity surge in November and December 2024, when the price soared around 40 per cent as its trading volume hit a high of 14.17 million stapled securities on Dec 6, from around 321,000 in late November. As at Dec 6, stapled securities of FHT were trading at S$0.505.
The manager said then that it was “not aware” of reasons for the surge.
FHT has a portfolio of 14 hotels and serviced residences across nine cities in Asia, Australia and Europe. The properties include InterContinental Singapore, Fraser Suites Sydney and Park International Hotel in London.
Listed on the Singapore Exchange mainboard since 2014, FHT has a market capitalisation of S$1.33 billion, with a portfolio valued at S$2 billion as at September 2024.
