SINGAPORE-LISTED Forterra Trust announced on Tuesday that it has received a mandatory takeover offer from Nan Fung International Holdings - one of the largest privately owned property developers in Hong Kong.
The offer price will be S$1.85 per share, at an 8.8 per cent premium to the closing price of Forterra's shares on Monday and 24.1 per cent higher than the volume weighted average price (VWAP) of the last three months.
The mandatory offer comes after Nan Fung exercised approximately three million Forterra share options at 34.8 Singapore cents each through its wholly owned subsidiary New Precise Holdings, resulting in a 30.79 per cent stake in Forterra.
Under the Singapore code, if a series of acquisitions results in the offeror carrying 30 per cent or more of the company's voting rights, the offeror must then extend the similar offer to other shareholders of the company.
.Nan Fung has no plans to delist Forterra from the Singapore Exchange (SGX). But if the offer results in their ownership of 90 per cent of Forterra and an eventual suspension of shares trading according to SGX's mainboard rules, Nan Fung will not adopt any added measures to protect Forterra's listing.
Listed on SGX in June 2010, Forterra has commercial real estate interests in China, currently owning a total of six office and retail properties in Shanghai, Qingdao and Beijing.
But the trust has not been performing well of late. For the most recent quarter that ended Sept 30, Forterra's quarter gross revenue dropped to S$12.9 million, a 29.5 per cent decline from the same period in 2013.
Upon takeover, the trust's business and operations are expected to stick to current trajectory. According to the announcement posted on SGX, Nan Fung has no intention to introduce any significant changes to Forterra, but will evaluate options or opportunities available to the trust.
An earlier version of this article incorrectly stated that the Nan Fung had exercised approximately three million Forterra share options at S$1.85 each, but the accurate cost each share options was exercised at was 34.8 Singapore cents. The article above has been revised to reflect this.