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CapitaLand's stake in CMA crosses 90%

Developer receives valid acceptances of 450.16m CMA shares or 11.5% stake

CAPITALAND has shored up its stake in its shopping mall unit, CapitaMalls Asia (CMA), past the 90 per cent threshold required to delist CMA.

This came after CapitaLand sweetened its privatisation offer for CMA with a higher offer price per share of $2.35, up from $2.22 previously.

As at June 4, it had received total valid acceptances of 450.16 million shares representing 11.5 per cent of CMA's issued share capital.

This raises its stake in CMA to 92.7 per cent.

CapitaLand has submitted an application to Singapore Exchange (SGX) for the delisting of CMA.

The offer remains open for acceptances until June 9, after which trading of shares in CMA on SGX will be suspended.

CapitaLand's move to privatise CMA, which manages 105 shopping malls, is aimed at simplifying its group structure and combining strengths across business units for integrated projects.

The deal is immediately earnings-accretive to CapitaLand's shareholders and raises its return on equity to 6.7 per cent from 5.4 per cent.

But its initial offer price for CMA was a point of contention among market watchers and CMA shareholders, given its narrow premium to CMA's initial public offer (IPO) price of $2.12 in November 2009.

CapitaLand raised its bid after a dialogue with unhappy CMA shareholders.

A report by independent financial adviser Deutsche Bank had said the offer terms "are fair and reasonable from a financial point of view in the context of a non-change of control transaction".

Credit Suisse and Morgan Stanley are joint financial advisers to CapitaLand on the CMA offer.