SINGAPORE (June 29): The manager of Accordia Golf Trust (AGT) announced that it has entered into a conditional agreement to fully divest its interests in its 88 Japan golf courses to Accordia Golf for a total cash consideration of JPY 61.8 billion ($804.1 million).
The purchase consideration translates to some 73.2 cents per unit of AGT, which represents a 29.5% premium above the Trust’s closing price of 56.5 cents per unit on June 23, the last full trading day immediately prior to the announcement.
The price also represents a premium of 12.9% and 5.1% to AGT’s adjusted net tangible assets (NTA) and net asset value (NAV) per unit respectively based on the unaudited consolidated financial results for the financial year ended March 31, 2020.
Accordia is the sponsor and unitholder of AGT.
As such, the proposed divestment constitutes an interested person transaction. The sum involved in the divestment also constitutes a major transaction.
Under the agreement, Accordia will acquire all membership interests in, and assume the debts, of Accordia Golf Asset Godo Kaisha (SPC), the holding company which holds the golf courses, at the time of the completion of the acquisition.
Following the acquisition, AGT will receive the full consideration amount from Accordia and will not need to apply any of this amount towards the repayment of the SPC’s debts.
The proposed divestment will proceed following approval from the Trust’s unitholders at an extraordinary general meeting (EGM), which will be held by Sept 14.
The proposed divestment is expected to be completed in 3Q20.
In a statement by AGT, it says that the proposed acquisition came on the back of the relatively low trading volume and persistent trading discount to its NAV. The trust was also experiencing a lack of acquisition-driven growth and a limited ability to improve its distribution per unit (DPU).
“Despite the difficult current environment, we believe our proposal offers an attractive price that exceeds AGT’s adjusted net asset value of JPY 58,787 million by 5.1%,” says Yuko Tashiro, representative director, president, and CEO of Accordia.
As at 11.36am, units in Accordia Golf Trust are changing hands flat at 64 cents.
