“Accordingly, the exchange ratio of 0.940x is final, except that the ESR-REIT Manager reserves the right to do so in a competitive situation,” the announcement by ESR-REIT says.
On Aug 6, ESR-REIT’s manager announced that it does not intend to increase the scheme consideration for Sabana Shariah Compliant Industrial REIT, announced on July 16. Sabana REIT’s unitholders are being offered 0.94x the price of ESR-REIT. Last month, this valued Sabana REIT at 37.7 cents. ESR-REIT closed at 39 cents on Aug 6, valuing Sabana REIT at 36.6 cents.
Quarz Capital Management which owns 5% of Sabana REIT, is not happy with the offer price, partly because it is now at a discount to Sabana REIT’s net asset value of 51 cents as at June 30, which in itself was lower than the NAV at Dec 31, 2019 of 57 cents. This was partly due to a 5% or $54.7 million decline in portfolio valuation. Appraisers and valuers assumed lower rental growth and lower occupancies for master lease properties that converted into multi-tenanted properties.
