Reit mergers: Is NAV a useful guidepost of value?
LAST week, this column delved into the proposed merger of Frasers Logistics & Industrial Trust and Frasers Commercial Trust, and concluded that the transaction will benefit FLT at the expense of FCOT. The key point of contention was that FLT will be issuing new units priced at a steep premium to its net asset value to acquire units in FCOT priced at a much-lower premium to its NAV.
So, would the merger of FLT and FCOT be any fairer if their NAVs, instead of their market prices, were used as a guidepost in setting their valuations for the transaction? Many investors would reflexively disagree with such an idea.
In the first place, the whole point of Reits (real e…
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Inside TSMC chairman Mark Liu's short but impactful reign
CSE Global bags US$36.5 million data centre contract extension
Keppel DC Reit reports 13.7% lower Q1 DPU of S$0.02192 amid loss allowances
Gazelle Ventures makes cash offer for No Signboard shares at S$0.0021 apiece
Singapore shares open higher on Friday; STI up 0.2%
TSMC estimates losses of US$92.4 million due to Taiwan earthquake