Sabana-ESR-Reit merger: Minority unitholders should make voices heard

IT is not often that minority shareholders get the chance to determine the outcome of a significant corporate deal, but the proposed merger between Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) and ESR-Reit is one such instance since substantial shareholders, both managers and concert parties will abstain from voting.

It is crucial to note that although Sabana Reit's and ESR-Reit's extraordinary general meetings will be held on Dec 4, these are online meetings. This means that voting will be by proxy, which in turn means that the relevant forms have to be submitted by 10am on Dec 1.

A key point of contention has been the scheme consideration, which implies a discount to Sabana Reit's net asset value (NAV) per unit. Some have said that it undervalues the Reit. But both Sabana Reit's and ESR-Reit's managers say that the discount is reflective of how the market has valued Sabana Reit over the years, and that the implied offer price actually represents a premium to Sabana Reit's last traded price prior to the announcement of the deal.