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The merger between Ascott Reit and A-HTRUST will have a combined asset value of $7.6 billion, and the combined entity will also emerge as the seventh biggest trust listed on the Singapore Exchange by asset value.
Ascott Residence Trust (Ascott Reit) and Ascendas Hospitality Trust (A-HTRUST) have entered into a combination deal that will see the combined entity becoming the biggest hospitality trust in Asia Pacific and the eighth largest globally.
With an asset value of $7.6 billion, the combined entity will also emerge as the seventh biggest trust listed on the Singapore Exchange by asset value.
The total consideration for the proposed merger is $1.2 billion, comprising $61.8 million in cash as well as 902.8 million new Ascott Reit-BT Stapled Units.
By way of a trust scheme of arrangement, Ascott Reit will acquire all the stapled units in A-HTRUST for $1.0868 per unit, “comprising $0.0543 in cash and 0.7942 Ascott Reit-BT stapled units issued at a price of $1.30”, said the two trusts in a joint release.
They noted that the transaction will create an enlarged portfolio of 88 properties with over 16,000 units across 39 cities and 15 countries in Asia Pacific, the US and Europe.
The combination will also diversify Ascott Reit’s global portfolio with presence in new cities – Seoul and Brisbane.
“The combined entity will have a higher proportion of stable income derived from master leases; well balanced by growth income derived from management contracts. With access to a larger capital base and a higher debt headroom of about S$1.0 billion, we will have greater financial flexibility to seek more accretive acquisitions and value enhancements,” said Bob Tan, chairman of Ascott Residence Trust Management Limited.
“The combined entity can then be strategically positioned to potentially enjoy a positive re-rating of the unit price and gain a wider investor base, which would be beneficial to all our unitholders.”
The proposed merger is subject to the approval of Ascott Reit unitholders as well as A-HTRUST stapled unitholders at their respective extraordinary general meetings and scheme meetings expected to be held this year.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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