Hot stock: FHT slides 24.8% after missing votes needed for proposed privatisation

SHARES of Frasers Hospitality Trust (FHT) hit a 5-month low on Tuesday (Sep 13) after the counter resumed trading. This came after the stapled group’s managers narrowly missed the number of votes needed for privatisation at a scheme meeting on Monday.

FHT dropped to a low of S$0.53 within an hour of the market opening on Tuesday, trading 24.8 per cent or S$0.175 lower. The last time the counter closed near this level was Apr 1, 2022.

By 4.02 pm, the counter was trading 22 per cent or S$0.155 lower at S$0.55, with 93.9 million stapled securities changing hands, making it the top most traded by volume. FHT ended Tuesday at the S$0.55 mark.

Although the stapled securities were trading “remarkably” lower on Tuesday, they have yet to give up all their gains seen in the April to May period, said Quiddity Advisors analyst Travis Lundy, who publishes on Smartkarma.

Furthermore, FHT’s stapled securities are now cheaper than most of its peers on a price-to-book ratio basis, and only slightly more expensive than Far East Hospitality Trust, added Lundy, who is “mildly bullish” on the counter.

Only 70.91 per cent of stapled securityholders representing 74.88 per cent of units voted in favour of the proposed scheme. Of the 227.6 million stapled securities represented by votes, 170.4 million voted to approve the scheme while the remaining 57.2 million voted against it.

For the scheme to be passed, the resolution needed approval from a majority of stapled securityholders who represent at least 75 per cent of the total number of units held by those present as well as those voting by proxy.

The proposed privatisation, priced at S$0.70 per stapled security, was expected to shave over S$1.3 billion worth of value from the local bourse. (see amendment note)

*Amendment note: A previous version of this story incorrectly stated the scheme consideration of the proposed privatisation as S$0.07 instead of S$0.70.