AGT to commission valuer to assess offer from parent

Singapore

THE trustee-manager of Accordia Golf Trust (AGT) will commission a valuer to assess the value of the trust's golf courses and the holding company of the golf courses, it said in response to queries from the Singapore Exchange (SGX) on Thursday.

SGX had noted that the offer of 63.17 billion yen (S$783 million) from AGT's parent company, Accordia Golf Co, was lower than the net asset value of 65.53 billion yen indicated in AGT's results for the second quarter ended Sept 30, 2019. (see amendment note)

AGT had, in December, named Daiwa Capital Markets Singapore and Ernst & Young Corporate Finance as joint independent financial advisers to help it evaluate Accordia Golf's proposal and obtain indications of interest from the market for the golf course assets.

Daiwa Real Estate Asset Management owns 51 per cent of the manager of AGT, which stands to gain a 0.15 per cent fee on any divestment. Daiwa Capital Markets Singapore and Daiwa Real Estate Asset Management are both subsidiaries of Daiwa Securities Group.

SGX queried AGT about potential conflicts of interest, which it has since addressed.

The trustee-manager reiterated that an independent financial adviser will be separately appointed and its recommendation to the audit committee will be disclosed to AGT unit-holders in a circular to be sent to them.

Accordia Golf Co, which has a controlling stake of 28.9 per cent in AGT, has offered to buy all 88 golf courses in AGT's portfolio in a non-binding proposal disclosed on Nov 28. The offer is for the interest AGT owns in the holding company of the golf courses, Accordia Golf Asset Godo Kaisha. This means AGT is not legally required to pay unit-holders special distributions from the asset sale.

But such a major transaction would have to be put to a vote under Rule 1014 of the Singapore Exchange (SGX) rulebook, and independent unit-holders would want to ensure they receive a bulk of the net proceeds as compensation for the loss of future cash flow if they are to approve the deal, market watchers say. The offer, if fully paid in cash, works out to roughly S$0.71 per unit.

Units of AGT closed down half a cent, or 0.73 per cent, at S$0.68 on Friday.

Amendment note: An earlier version of this article stated that AGT's parent had made a buyout offer. It is in fact an offer to buy the trust's assets.