ARA Logos minorities may support merger with ESR-Reit, but not because it's a good deal
Gross exchange ratio disadvantages ARA Logos unitholders, but scramble for assets could spur support for merger with ESR-Reit
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UNITHOLDERS of ARA Logos Logistics Trust have no compelling reason to vote in favour of the proposed merger with ESR-Reit.
ARA Logos' market capitalisation just prior to the merger announcement stood at nearly S$1.4 billion - not that much smaller than ESR-Reit's S$1.9 billion, and sufficiently large to independently pursue acquisitions.
More importantly, ARA Logos was trading at a lower yield than ESR-Reit (5.1 per cent versus 6.1 per cent); and a higher premium to its book value (39 per cent versus 21 per cent).
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