Sabana Reit’s independent directors recommend unitholders accept Volare’s partial offer

THE independent directors of the manager of Sabana Industrial Reit : M1GU 0% (Sabana Reit) have skipped the appointment of an independent financial adviser (IFA) and recommended unitholders accept the partial offer from substantial shareholder Volare Group.

The Swiss group, which holds a 5.4 per cent stake in Sabana Reit, had made a voluntary conditional partial offer of S$0.465 per unit in cash for 10 per cent of the units that it did not already own.

The partial offer will close at 5.30 pm on Mar 10.

The manager of Sabana Reit had earlier declared distribution per unit (DPU) of S$0.0146 for the second half of FY2022, which will be paid on Mar 27 after the books closure date on Feb 7.

As the closing date of the offer will be after the declared books closure date of H2 DPU, the ex-distribution offer price will be S$0.4504.

“The independent directors have not appointed an IFA to advise on the partial offer, and have instead consulted a duly licensed financial adviser on the financial terms of the partial offer,” the manager of the real estate investment trust (Reit) said in a circular to unitholders on Friday (Feb 24).

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Among the key considerations in recommending unitholders accept the partial offer, the independent directors noted that the offer price is at a premium of 9.4 per cent above the volume-weighted average price (VWAP) of Sabana Reit units on the day the partial offer was announced.

The offer price is also at premiums of between 5.7 per cent and 15.4 per cent to the historical VWAP of the units over the last one-month, three-month, six-month, one-year, two-year, three-year and five-year periods up to the partial offer announcement date.

The independent directors also noted that the offer price implies a price-to-net asset value (P/NAV) ratio of 0.87 times for Sabana Reit units.

This represents premiums of between 3.6 per cent and 11.5 per cent to Sabana Reit’s historical average trading P/NAV ratios in the last one-year, two-year and five-year periods up to the partial offer announcement date.

The P/NAV ratio implied in the offer price is also close to the average P/NAV ratio of 0.88 times for peers such as Aims Apac Reit : O5RU 0% and Daiwa House Logistics Trust : DHLU 0%, the independent directors said.

Activist investor Quarz Capital earlier this week issued an open letter asking the management and board of Sabana Reit not to “waste unitholders’ monies” by appointing an IFA to evaluate the partial offer from Volare Group.

Under the Takeover Code, there is no requirement for the directors to obtain competent independent advice if a partial offer does not result in the offeror and its concert parties holding 30 per cent or more in the offeree.

Units of Sabana Reit closed 1.2 per cent or S$0.005 higher at S$0.425 on Friday, before the announcement.