Accordia Golf refutes Hibiki's letter, says offer to AGT was made after extensive negotiations

Singapore

ACCORDIA Golf, the sponsor of Accordia Golf Trust (AGT) on Friday lashed back at AGT's largest minority unitholder, who alleged that the proposed price to buy over the trust's golf courses is "too low".

In a reply to Hibiki Path Advisors, which has a 7.6 per cent stake in AGT, Accordia Golf said it is "unclear" how Hibiki reached this position as it has not provided an opinion from any independent and qualified advisory firm, investment bank or valuer to support its opinion.

This is in contrast to the process that is being undertaken by independent directors of AGT's trustee-manager, it said.

AGT owns 88 golf courses across Japan. In June, Accordia Golf had proposed to acquire them for 61.8 billion yen (S$804.1 million), or an implied purchase consideration of S$0.732 per unit. Hibiki said in an open letter on July 3 that the price offered is too low, as these assets generate "significantly attractive cash flow".

On Friday, Accordia Golf said the agreement to purchase these golf courses was entered into after extensive negotiations between Accordia and the trustee-manager's independent directors.

This followed a wide market testing process by Ernst & Young Corporate Finance and Daiwa Capital Markets Singapore on behalf of the independent directors and involved solicitation of competing proposals from third parties, Accordia Golf said, adding that its offer was the only definitive offer received.

"It takes into account, among others, AGT's cash flow, net assets, and premia to historical trading prices offered in similar transactions in Singapore," said Accordia Golf. "We believe that our offer provides an attractive opportunity for the unitholders of AGT to expeditiously realise the value of their units at a premium to adjusted net asset value and historical trading prices."

It also said that Hibiki's use of the 12-month dividend yield of the Tokyo Stock Exchange Reit Index (TSEREIT) to derive a per-unit value for AGT "is not an appropriate comparison as the TSEREIT comprises a large number of constituents with different asset type, quality, growth prospects and access to financing and none of the constituents are focused on golf course assets."

It added that the tax structure and accounting and distributing policies, among other things, of Japanese-listed real investment trusts are different from what is adopted by AGT.

Accordia Golf also said Hibiki made a misleading reference to Accordia Golf being the "parent company" of AGT, arguing that there is "no statutorily defined concept of 'parent company' under Singapore law".

Accordia Golf holds 28.85 per cent of the total units of AGT and 49 per cent of the shares of the trustee-manager, which means AGT is not a subsidiary of Accordia Golf, it said. "We request for Hibiki to rectify this error in their letter as it has mischaracterised the relationship between Accordia and AGT."