Mapletree Merger

Nod Given To S$17.1 billion Mapletree Merger

SINGAPORE – The respective unit holders of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) have both voted to approve a merger that will lead to the creation one of the 10 biggest real estate investment trusts (REITs) in Asia, reported The Business Times on Monday evening (23 May, SGT).

The combined entity, which will be known as Mapletree Pan Asia Commercial Trust (MPACT), will have a theoretical market capitalisation of around S$10.5 billion, making it one of the top 3 REITs listed in Singapore, after CapitaLand Integrated Commercial Trust and Ascendas REIT.

Post-merger, MPACT’s portfolio will comprise 18 commercial properties collectively valued at S$17.1 billion across 5 markets in Asia, namely South Korea, Japan, China, Hong Kong, and Singapore.

During separate extraordinary general meetings (EGMs) on Monday (May 23), all resolutions needed for the merger were passed.

“We are heartened to receive the approval from MCT unit holders for the merger,” said Sharon Lim, CEO of MCT’s manager.

“The enlarged scale and stronger financial muscles of MPACT will enable us to undertake capital recycling opportunities, take on value-enhancing asset enhancement and development initiatives, and pursue larger acquisitions in Asia’s key gateway market,” she noted.

The greenlighting of the merger from both sets of unit holders comes after the managers of the 2 Mapletree REIT in March offered MNACT unit holders the option to receive the entire scheme consideration for the proposed merger wholly in cash, at $1.1949 per unit.

The cash-only option was deemed as a way to appease disgruntled unit holders from both trusts

Three months earlier, Singapore’s Securities Investors Association raised into question the necessity of the proposed merger, given the lack of “apparent operational synergies” between the two trusts.

Quarz Capital Management was also previously against the merger, saying that the initial terms undervalued MNACT’s assets. But the activist fund manager later described the cash-only offer as “fair” and “a win-win for all parties”.

Subject to the necessary approvals and the satisfaction or waiver of all conditions, the merger is expected to occur in early August. Thereafter, MNACT will be delisted from the Singapore Exchange (SGX) in mid-August.

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