He writes: “We recommend unitholders to reject the low-ball privatisation offer of $1.19 per share, which values the REIT at a 42% discount to its latest book value (BV).”
Following Suntec REIT’s FY2024 ended Dec 31, 2024, results, RHB Bank Singapore analyst Vijay Natarajan has kept his “buy” call and target price of $1.35. Meanwhile, CGS International’s (CGSI) Lock Mun Yee has maintained her “hold” call at a lowered target price of $1.33 from $1.38 previously. The REIT reported an FY2024 distribution per unit (DPU) of 6.192 cents, 2.3% lower y-o-y.
Natarajan notes in his Jan 27 note that besides the REIT’s 2HFY2024 and FY2024 DPU slightly missing his estimates, the ongoing privatisation offer by Gordon and Celine Tang “deeply undervalues” its long-term potential and is “unlikely to be successful”. Instead, the offer is likely to set a floor to the REIT’s share price.
