MCT-MNACT merger makes most sense when viewed from perspective of Mapletree Investments

AFTER digesting the proposed merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) over the past week, the verdict from the market seems clear: MCT has lost 8.5 per cent of its market value while MNACT has slipped 1.8 per cent.

As I see it, the implications of this thumbs-down from the market are 3-fold:

• Unitholders of MCT should vote against the merger.
• Unitholders of MNACT should sell their holdings in the market to take advantage of MNACT's elevated but falling unit price.
• Mapletree Investments - the sponsor group behind MCT and MNACT - should prepare to address concerns that the merger prioritises its own interests over those of investors who have been supporting its capital management platforms.

Under the proposed merger, unitholders of MNACT will exchange each unit they own for 0.5963 of a new MCT unit; or 0.5009 of a new MCT unit plus S$0.1912 in cash.