CDLHT hotel deals 'not prejudicial' to securityholders' interests: IFA

CDL Hospitality Trusts' (CDLHT) two proposed hotel transactions are both on normal commercial terms, according to independent financial adviser Deloitte & Touche Corporate Finance.

The proposed redevelopment of Novotel Singapore Clarke Quay as well as the potential acquisition of W Singapore in Sentosa Cove are "not prejudicial" to the interests of CDL Hospitality Real Estate Investment Trust (H-Reit), CDL Hospitality Business Trust (HBT) or the minority securityholders, the adviser said in a circular despatched on Friday. CDLHT is a stapled group comprising H-Reit and HBT.

After considering the adviser's opinion, the audit and risk committees and independent directors of CDLHT's managers are recommending that its stapled securityholders vote in favour of both deals at the upcoming extraordinary general meetings (EGMs).

The EGMs will be held at 10am on Jan 23 in Orchard Grand Ballroom 1 & 2 of Orchard Hotel Singapore.

CDLHT had announced both transactions in November. The stapled group is looking to sell its entire stake in Novotel Singapore Clarke Quay for S$375.9 million to CapitaLand and City Developments Limited (CDL), as part of redevelopment plans for the Liang Court site. A new "upper midscale" hotel will be built in Novotel's place, and CDLHT will then buy it under a forward-purchase agreement with CDL at the lower of either S$475 million or 110 per cent of actual development costs incurred.

Separately, CDLHT is also proposing to buy the W Singapore luxury hotel for S$324 million from Cityview Place Holdings, a wholly-owned subsidiary of CDL.

Stapled securities of CDLHT were trading flat at S$1.63 as at 9.02am on Friday.