Croesus Retail Trust - RHB Invest 2017-06-29: Take Up The Offer At SGD1.17

CROESUS RETAIL TRUST S6NU.SI

Croesus Retail Trust - Take Up The Offer At SGD1.17

CRT has received an offer of SGD1.17/unit from the affiliates of Blackstone Real Estate to privatise CRT. Shareholders would still be permitted to receive a 4.06 cent dividend on top of the offer.
We feel that the offer price is fair, as it represents approximately a 20% premium to the NAV/unit as at 31 Mar 2017.

We recommend that existing investors to take up the offer as it allows them to realise their investment at a fair price.

Croesus Retail Trust (CRT) announced that there is a proposed acquisition of all its issued units by Cyrus BidCo Pte Ltd (the offeror) (a company incorporated in Singapore by funds advised by Blackstone Real Estate).
The scheme of consideration is structured such that the offeror would pay each unitholder SGD1.17/unit in cash as at the book closure date. This represents a significant premium to the prevailing and historical trading price of units prior to the last full trading day. It is approximately 38% premium over the 12-month volume weighted average price (VWAP)/unit, 34% and 31% premium over 6-month and 3-month VWAP/unit respectively. It also exceeds the highest closing price of the unit since its IPO.
This scheme consideration represents an attractive valuation and compelling price for investors. Once the deal is complete, in accordance with its terms, CRT would be delisted and removed from the official list of the Singapore Exchange (SGX).

In addition to the scheme consideration, unitholders of CRT may receive a distributable income of up to an aggregate of approximately SGD31.3m, translating into 4.06 cents/unit.
The scheme of consideration would not be reduced by the permitted distributions. However, the offeror reserves the right to reduce the scheme consideration if any distribution in excess of the permitted distribution is declared, paid or made by the trustee- manager on or after the date of the implementation agreement.

We feel that the offer price is fair, as it represents approximately a 20% premium to the NAV/unit as at 31 Mar 2017. As a result, we recommend existing investors to take up the offer as it allows them to realize their investment at an attractive price.
In addition, shareholders are likely to also still be entitled to the 4.06 cent dividend, assuming the effective date falls on or before 31 Oct 2017.
The scheme is expected to be completed by the 4Q17, subject to the satisfaction or waiver (where applicable) of the scheme conditions.

Jarick Seet RHB Invest | http://www.rhbinvest.com.sg/ 2017-06-29

RHB Invest SGX Stock Analyst Report TAKE PROFIT Maintain NEUTRAL 1.17 Up 1.000