SINGAPORE (July 10): The Independent financial advisers (IFAs) of OUE Commercial REIT (OUE C-REIT) and OUE Hospitality Trust (OUE-HT) have advised the directors of both trusts to recommend unitholders vote in favour of the merger at the upcoming extraordinary general meeting (EGM).
Under the proposed merger deal, OUE C-REIT will acquire all stapled securities of OUE-HT via a scheme of arrangement.
For every OUE-HT stapled security held, OUE C-REIT will pay 4.075 cents in cash plus 1.3583 new OUE C-REIT units.
This values the merger deal at $1.49 billion which will be satisfied by the payment of $74.6 million in cash and the issuance of 2.5 billion new OUE C-REIT units at 57 cents each to OUE-HT stapled securityholders.
Deloitte & Touche, the IFA of OUE C-REIT, said the merger is based on “normal commercial terms” and will “not be prejudicial to the interests of OUE C-REIT and its minority unitholders”.
As such, the independent directors of OUE C-REIT recommend unitholders vote in favour of Resolution 1 which relates to the merger, and Resolution 2 which relates to the proposed issuance of new OUE C-REIT units.
Australia and New Zealand Banking Group (ANZ), the IFA for OUE-HT, is of the view that the stapled securities and consideration units are "both fairly valued” and the financial terms of the trust scheme are "fair and reasonable" based on the scheme consideration and the consideration unit price as at June 25.
Accordingly, the independent directors of OUE H-Trust recommend its stapled securityholders vote in favour of the trust deeds amendment resolution at the EGM and the trust scheme resolution at the trust scheme meeting.
The two EGMs are expected to take place on Aug 14 at Mandarin Orchard Singapore, at 10am for OUE C-REIT unitholders and 3pm for OUE H-Trust stapled securityholders.
As at 1.37pm, stapled securities in OUE-HT are trading at 74 cents while units in OUE C-REIT are trading at 52 cents.
