Swiss group Volare makes partial offer for Sabana Reit at S$0.465 per unit

SABANA Industrial Reit’s substantial shareholder Volare Group on Friday (Jan 20) launched a voluntary conditional offer to acquire an additional 10 per cent of Sabana units at S$0.465 per unit.

The offer price represents a premium of 9.4 per cent over the volume-weighted average price on Jan 20; it is also respectively 8.6 per cent, 9.7 per cent and 6.9 per cent over the volume-weighted average price during the one, two and six-month periods preceding Jan 20.

Volare, which holds 5.4 per cent of issued units in Sabana, is a Switzerland-incorporated entity with various businesses. Its subsidiary, Oel-Pool SG, is one of Switzerland’s leading suppliers of fossil fuels, and operates over 700 petrol stations together with its unit, Moveri.

Volare’s other business lines include vehicle care, wood production and trade, construction services and investments in real estate.

The group said it is launching the partial offer to diversify its business away from fossil fuels and build up its real estate portfolio.

Sabana’s units are thinly traded, Volare noted, which prevents it from acquiring units from the open market efficiently, and prevents larger unitholders from selling. It believes the partial offer presents a good opportunity for unitholders to monetise their holdings.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Quartz Capital, which had slammed a controversial potential merger between Sabana and larger rival ESR-Reit in 2020, called Volare’s offer attractive.

“The offer is at an attractive premium of over 34 per cent over the lowball implied-merger offer of S$0.348 recommended by the Reit manager in Dec 2020 (one Sabana unit for 0.94 times ESR-Reit unit),” said Quarz Capital Asia’s head of research, Havard Chi.

“Unitholders get to eat twice – pocket the coming dividend and also tender at the attractive offer.”

Chi said Sabana faces a number of serious challenges. Its occupancy rate has remained below that of its peers and the national average, and its unit price consistently trades at a large discount to its net asset value.

“Given the attractive offer, we believe it might make sense that unitholders tender part of their units at a good price to a strong independent unitholder, and also retain some to vote against the manager,” he said.

Trading in Sabana’s units ended on Friday at S$0.425, up S$0.005 or 1.19 per cent.