Frasers Hospitality Trust undergoes strategic review

[SINGAPORE] Frasers Hospitality Trust (FHT) is undergoing a strategy review, though there is currently no certainty if its existing business strategy will change.

This follows a failed privatisation bid made by managers of the stapled group in 2022 and a trading activity surge in November and December 2024, when the stapled security soared around 40 per cent as its trading volume hit highs. The manager said then that it was “not aware” of reasons for the surge.

“As part of this review, various options (including exploring options with the sponsor of FHT) are being considered to ensure alignment with the interests of stapled securityholders,” the manager said on Wednesday (Apr 23).

However, it added that “there is no certainty or assurance that any transaction in respect of the stapled securities will arise, and the managers may decide to continue with FHT’s existing business strategy”.

The manager added that it will make announcements in due course, should any material developments that warrant disclosure arise. It urged investors to exercise caution and refrain from taking action with respect to their FHT stapled securities that may be prejudicial to their interests.

FHT is a stapled group comprising Frasers Hospitality Reit and Frasers Hospitality Business Trust.

Privatisation bid

In 2022, a bid to privatise the Singapore-listed real estate investment trust (S-Reit) fell through as it failed to garner sufficient approval from stapled securityholders.

The resolution narrowly missed the minimum approval level of votes representing 75 per cent of units required for it to be passed at the September 2022 scheme meeting. It attained favourable votes representing 74.88 per cent of units from around 70.91 per cent of stapled securityholders.

In June 2022, Frasers Property Hospitality Trust, a wholly owned subsidiary of FHT’s sponsor Frasers Property, proposed to acquire all FHT stapled securities aside from those held by itself, its subsidiaries and TCC Group Investments at a cash consideration of S$0.70 apiece.

The proposed privatisation, which would have erased more than S$1.3 billion worth of value from the local bourse if it succeeded then, came after the hospitality-focused S-Reit announced a strategic review of its business earlier in April that year.

Challenges FHT faced included difficulty in improving its distribution per stapled security and net asset value amid subdued growth of the hospitality sectors of markets it operates in, alongside the Russia-Ukraine war compounding pandemic-induced supply chain disruptions and raising costs.

Stapled securities of FHT ended on Tuesday 1.7 per cent or S$0.01 higher at S$0.60.