Paragon Reit unitholders to vote on proposed privatisation on Apr 22

[SINGAPORE] Unitholders will vote on the proposed privatisation of Paragon Reit in an extraordinary general meeting (EGM) and scheme meeting on Apr 22, the board said in a bourse filing on Thursday (Mar 27).

If approved, unitholders will receive S$0.98 per unit from the offeror Times Properties.

PrimePartners, the independent financial adviser (IFA) appointed by the real estate investment trust (Reit) for the privatisation offer, said that the offer was fair and reasonable, having considered the factors set out in its letter to the Reit’s independent directors and trustee.

The IFA said that the scheme consideration of S$0.98 per unit represented a slight premium of 4.4 per cent over the Reit’s net asset value (NAV) per unit, and a premium of 7.1 per cent over its adjusted NAV per unit.

The IFA also noted that the scheme consideration represented premiums of more than 10 per cent over the units’ volume-weighted average prices spanning various lookback periods of up to two years.

It added that the scheme presents an opportunity for unitholders to exit their investments due to low trading liquidity and odd lots.

The scheme is contingent on the approval of amendments made to the Paragon trust deed, intended to facilitate the implementation of the scheme, said the board, acting as the Reit’s manager. These amendments, which will be voted on during the EGM, would require that 75 per cent of total votes cast approve of the resolution.

Should unitholders approve the amendments, the scheme resolution will then be voted on, the board said. This resolution would require that 50 per cent of total voting minority unitholders, as well as 75 per cent in value of the units held by voting minority unitholders, approve the scheme.

The offeror Times Properties is a wholly owned subsidiary of Cuscaden Peak Investments, whose parent Cuscaden Peak is partially owned by a subsidiary of Mapletree Investments – making it part of the Temasek investment stable. Times Properties intends to acquire all units in the Reit held by unitholders other than Cuscaden Peak and its subsidiaries.

If the scheme is passed, the privatisation is expected to be effective on May 26, and unitholders will be paid the scheme consideration on Jun 4. The scheme consideration will not be reduced by the H2 FY2024 distribution per unit of S$0.0233, the filing said.

Majority unitholders Cuscaden Peak and its subsidiaries, who own 61.5 per cent of the Reit’s units, will abstain from voting, the manager said. Therefore, the outcome of the privatisation scheme would be decided solely by minority unitholders.

Units of Paragon Reit were trading at S$0.975, up 0.5 per cent or S$0.005 at 9.53 am, after the announcement.