Hot stock: Frasers Hospitality Trust up by more than 7% on talks of privatisation

TALK of a possible privatisation have sent the stapled securities of Frasers Hospitality Trust (FHT) climbing in Friday's (Apr 8) trade.

Its price shot up as high as S$0.615 at 1.18 pm, an increase of S$0.045 or 7.9 per cent over its last closing price, with close to 5.2 million securities changing hands. FHT ended the day at S$0.60, up 5.3 per cent.

The last time the mainboard-listed counter was trading above S$0.615 was almost 2 years ago in March 2020.

The surge came about after Bloomberg reported shortly after 1 pm on Friday that the hotel and serviced residence trust is considering a plan to go private amid concerns that the price of its stapled securities does not reflect the company's value.

According to the report, ACV : ACV 0%has received board approval to explore a privatisation and hired a financial adviser.

But the company may choose not to proceed if the deal structure isn't favourable.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

FHT stapled securities were trading between S$0.575 and S$0.585 before Bloomberg's report sent its price over the $0.60 mark at about 1.15 pm, eventually peaking at S$0.615.

It then pulled back slightly from this high, eventually trading at S$0.60, up S$0.03 or 5.3 per cent at about 1.35 pm.

The managers of FHT had said in a bourse filing before market opened on Friday that they have not received any written proposals for them to take on a new business strategy, nor have they made any decision on the matter as yet, without going into specifics.

The trust, which comprises of both Frasers Hospitality Real Estate Investment Trust and Frasers Hospitality Business Trust stapled as 1 entity, said that its managers do review strategic options now and then to unlock value for FHT's stapled securityholders.

However, the exploration of strategic options may not result in a transaction as they may choose to continue on with the existing business strategy, they said in a bourse filing in response to media queries on whether FHT is involved in a strategic option.

The managers added that they will make appropriate announcements on the Singapore Exchange if there is any material development which they are obliged to disclose. They also advised its stapled shareholders to refrain from taking any action on their securities that may not be in their best interests.

READ MORE:

• CLI, Frasers Hospitality don't see big hit to Shenzhen businesses from temporary lockdown
• Frasers Hospitality expands to Cambodia with launch of 3 properties
• Frasers: Hospitality portfolio tested by pandemic headwinds; investment and residential portfolios are resilient
• Frasers Hospitality Reit takes out S$70m in loan facilities