Second attempt to privatise FHT succeeds with 99.2% of units represented in favour

[SINGAPORE] A second attempt to privatise Frasers Hospitality Trust (FHT) succeeded on Friday (Aug 15), after stapled security holders approved the privatisation offer at a scheme meeting.

Of the 718 stapled security holders present and voting, 618 – with a total of 321.2 million units, or 99.2 per cent of all units represented at the meeting – voted in favour of the proposed scheme. The remaining 100 stapled security holders, with an aggregate of 2.6 million units, voted against.

For the scheme to be passed, the resolution had to be approved by a majority of stapled security holders, representing at least 75 per cent of the total number of units held by those present and voting, either in person or by proxy.

Real estate giant Frasers Property had proposed to privatise FHT at S$0.71 per stapled security on May 14, citing the trust’s inability to improve its distribution and growth in the face of macroeconomic headwinds.

The offer price values the trust at S$1.37 billion. It implies a premium of 11.1 per cent over its net asset value (NAV); this exceeds the implied average premium over NAV of 1.04 times for previous Singapore real estate investment trust (Reit) privatisations since 2020.

Various parties, including the offeror – a wholly owned subsidiary of Frasers Property – the sponsor of FHT and its concert parties, substantial stapled security holders of FHT, and the managers of FHT abstained from voting on the scheme.

This is the second time in three years that Frasers Property has attempted to privatise the stapled group. It tried to do so in September 2022 for S$0.70 per stapled security, though the privatisation attempt narrowly failed then after being voted down by shareholders.

Eric Gan, chief executive officer of FHT’s managers, said: “As the managers of FHT, it has been our objective to maximise and realise value for our stapled security holders… We will now focus on taking the necessary steps to complete the transaction so that stapled security holders can receive their funds in a timely manner.”

Units in FHT and FPL closed at S$0.705 cents and S$0.96, respectively, on Thursday before a trading halt on Friday morning, before the scheme meeting.