Sunday, November 1, 2015

Saizen REIT entire portfolio is bought by Lone Star for an offer price of S$1.172

Just after less than 1 week of posting on the possibility of Saizen Reit being acquired by another firm on my blog, the news is confirmed!! Existing shareholders of Saizen Reit would be happy hearing this news. Saizen Reit has been a good investment for me for the past 2 years. It is sad to bid goodbye to this stable income producing investment. 

This is the confirmed news:

"Japan Residential Assets Manager Limited, in its capacity as manager of Saizen Real Estate
Investment Trust (“Saizen REIT”, and as manager of Saizen REIT, the “Manager”) wishes to
announce that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of
Saizen REIT, has on 31 October 2015 accepted an offer (the “Offer”) for the acquisition of all the real estate assets (the “Properties”) in Saizen REIT’s portfolio in Japan by Triangle TMK for an agreed purchase consideration of JPY44,660.0 million (S$517.3 million) Triangle TMK is a Japanese affiliate of Lone Star Real Estate Fund IV and Lone Star Funds.

The Purchase Consideration is at a 3.4% premium to the appraised value of the Properties.

The Purchase Consideration is estimated to translate into an implied net offer price of S$1.172 per unit of Saizen REIT (“Unit”), or a slight premium to Saizen REIT’s adjusted net asset value (“NAV”) per Unit based on audited figures as at 30 June 2015, after taking into account estimated transaction-related costs and expenses
The estimated implied net offer price of S$1.17 per Unit represents a 36.9% premium above the
closing price of S$0.855 per Unit on 22 October 2015, being the day immediately prior to the
Manager’s announcement of the Offer on 23 October 2015, and a 40.9% premium above the 1-month
volume-weighted average price per Unit as of 22 October 2015."

The offer price to me is quite reasonable at $1.172 as its a premium to its NAV. I think this exceeds the expectation of many existing shareholders. Its a 30% rise above the closing price of 92 cents last week before trading halted. 

Looking back, I've written a series of articles on Saizen Reit which affirmed my decision to invest in the Japanese real estate market. Saizen Reit is the largest investment I have in my portfolio. With this gone, I'll have more cash to deploy to the next best investment in search for better dividend income. 

Congratulations to all existing shareholders of Saizen Reit!

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