Hot stock: Ascott Residence Trust down 5.8%; private placement closes at 98.3 S cents
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UNITS of Ascott Residence Trust (ART) HMN were down in the morning trading session on Friday, after the managers of the real estate investment trust (Reit) said its private placement to raise S$150 million was priced at the bottom end of its price range.
The counter reached a low of S$0.98 as at 9am on Friday, down S$0.06 or 5.8 per cent, with 5.2 million shares changing hands.
No married deals were recorded, according to ShareInvestor data.
As at the midday break, units of ART have eased slightly to 98.5 Singapore cents, down 5.5 cents or 5.3 per cent.
The stock trades on a cum-dividend basis. ART had called for a trading halt on Thursday, prior to its announcement of the proposed private placement, and its units resumed trading on Friday.
On Thursday, ART's managers said it would acquire Wildwood Lubbock, a 1,005-bed student accommodation asset in Texas, United States for US$70 million, and proposed a S$150 million private placement to partially fund the acquisition.
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It gave an indicative price range of between 98.3 Singapore cents and S$1.014 per new stapled security, which represents a discount of between 2.5 per cent and 5.5 per cent to ART's volume-weighted average price of S$1.040 per stapled security, for trades done on Sept 8 up to the time the placement agreement was signed on Sept 9.
On Friday, the managers said the placement closed about 2 times covered and was priced at the bottom end of its price range at 98.3 Singapore cents per new stapled security.
About S$58.7 million or 39.1 per cent of the gross proceeds will go towards partially funding the Wildwood Lubbock acquisition, S$89 million or 59.4 per cent will be used to partially fund future potential acquisitions. The remaining S$2.3 million or 1.5 per cent will be used to pay the estimated professional and other fees and expenses in connection with the private placement.
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