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OUE C-Reit, OUE H-Trust’s S$1.49b merger approved by holders

THE proposed merger of OUE Commercial Real Estate Investment Trust (C-Reit) and OUE Hospitality Trust (H-Trust), via a trust scheme of arrangement, was approved by holders of both trusts on Wednesday.

C-Reit unitholders and H-Trust stapled security holders gave the green light on all resolutions pertaining to the merger at separate extraordinary general meetings (EGMs) during the day, according to bourse filings by the trusts' managers.

In light of the approval, the managers of H-Trust will submit their application to the court, for the court to sanction the trust scheme, they said on Wednesday evening after the market closed.

The court hearing is likely to take place on Sept 5, while the expected last day of trading for H-Trust's stapled securities is Sept 12, according to the indicative timeline provided by the managers.

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Before the market opened on Wednesday, C-Reit, H-Trust and their parent company OUE Limited all called for immediate trading halts, pending the release of announcements on the EGMs’ results.

Under the proposed scheme, OUE C-Reit will acquire OUE H-Trust by paying the latter's holders, for every H-Trust stapled security held, 4.075 Singapore cents in cash plus 1.3583 new OUE C-Reit units.

This translates to a deal valuation of S$1.49 billion in total, with S$74.6 million to be paid in cash and the balance paid via the issue of 2.5 billion new C-Reit units to H-Trust holders at S$0.57 per C-Reit unit.

Last month, the independent financial advisers (IFAs) advised the directors of both trusts to recommend unitholders vote in favour of the merger at the EGMs.

If the merger goes through, OUE Limited and its related corporations will continue to hold a 48.4 per cent stake in the enlarged Reit. This is inclusive of the interests held by OUE Limited, OUE Realty and Golden Concord Asia Limited.

The merged entity is said to be one of Singapore's largest Reits by assets, with seven properties under its umbrella: four from C-Reit — OUE Bayfront, One Raffles Place, OUE Downtown Office, Lippo Plaza, and three from H-Trust — Mandarin Orchard Singapore, Mandarin Gallery and Crowne Plaza Changi Airport.

Shares of OUE Limited ended trading at S$1.47 on Tuesday, down three cents from Thursday’s close. Units of OUE C-Reit closed down 0.5 cent at S$0.53 on Tuesday while stapled securities of OUE H-Trust ended flat at S$0.73.