UNITS of Paragon Real Estate Investment Trust (Paragon Reit) jumped on Tuesday (Feb 11) after the manager announced that it received a S$0.98-per-unit privatisation offer from Times Properties.
The counter surged 11.8 per cent or S$0.105 to S$0.995 after the mid-day trading break, during which it asked for its trading halt to be lifted. The Reit manager had called for a trading halt in the morning to announce the privatisation offer and its full-year earnings.
The last time Paragon Reit traded at such levels was in January 2023. By 2.03 pm, the counter was up 11.2 per cent or S$0.10 at S$0.99.
Times Properties, a wholly owned subsidiary of Cuscaden Peak Investments, is looking to take Paragon Reit private by way of a trust scheme of arrangement, for S$0.98 per unit.
The offeror is looking to acquire all units in Paragon Reit held by unitholders, other than Cuscaden Peak and its subsidiaries.
As at the joint announcement date on Tuesday, Times Properties holds directly and indirectly approximately 21.5 per cent of the issued units of Paragon Reit.
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The offer price represents a 10.1 per cent premium to the counter’s last transacted price of S$0.89 on Monday. It also represents a premium over the volume weighted adjusted price – of 10.9 per cent for one month; 11.6 per cent for three months and 12.8 per cent for 12 months.
Cuscaden Peak Investments and Paragon Reit said the scheme would allow unitholders “to realise their investment in cash at an attractive valuation with no trading costs”, and enable them “to immediately reinvest proceeds into other opportunities”.
They noted that Paragon Reit has one of the lowest free floats among its retail Singapore Reit (S-Reit) peers and has historically experienced low trading liquidity. Its total assets have grown 1.3 times since its initial public offering in 2013, compared to the average of 2.9 times for other retail S-Reits, they added.
The offeror believes that Paragon Reit “faces trading conditions that will continue to constrain its potential for sustained growth and long-term value creation”.
Separately, the manager also posted a distribution per unit (DPU) of S$0.0233 for the second half ended December, down 10.4 per cent from S$0.026 in the previous corresponding period.
This brings FY2024 DPU, excluding special distribution, to S$0.0465, down 7.4 per cent from S$0.0502 previously.
The H2 distribution of S$0.0233 will be paid on Mar 28, after the record date of Feb 19.
