Slightly less than five years after it was first listed on the Singapore Exchange (SGX) on November 2009, CapitaMalls Asia (CMA) faces the fate of being privatised.
CapitaLand Limited, CMA’s parent company, had announced on June 5 that it has acquired a 92.7 per cent stake in the only shopping mall developer and manager listed on SGX, crossing the 90 per cent threshold needed to delist a company. It has submitted an application to SGX to take CMA off the Mainboard, and trading of the shares of the shopping mall operator will be suspended after June 9.
This marks the end of a take-over bid, that begun on 14 April 2014, by CapitaLand to acquire the necessary stake for delisting its subsidary, in which it held a 65.4 per cent stake then. CapitaLand made a conditional offer of S$2.22 a share to minority shareholders, a 4.72 per cent premium above CMA initial price offer (IPO) of S$2.12. The offer was conditional on CapitaLand being able to buy over enough shares to breach the 90 per cent mark for delisting. Some analysts viewed CapitaLand’s offer price as fair given that CMA mostly traded at under S$2.12 after listing.
Nevertheless some disgruntled shareholders were dissatisfied by the small margin of the offer price above its IPO. This led CapitaLand to up its offer to a final price of S$2.35 a share on May 16. This time the offer was unconditional. Shareholders who had previously agreed to sell at S$2.22 a share would also have their price revised to the final price.
CapitaLand was borne forth, in November 2000, from the merger of Pidemco Land Limited and DBS Land Limited to create the largest listed real estate firm in South East Asia. Since then it has gone from strength to strength with Singapore and China as its core markets. The listed entities in its portfolio include CapitaMalls Asia, Ascott Residence Trust, CapitaCommercial Trust, CapitaMall Trust, CapitaMalls Malaysia Trust and CapitaRetail China Trust.
The decision to take CMA private was meant to streamline CapitaLand’s operations in integrated projects it carries out with CMA. Having CMA as a separate entity will subject it to corporate governance requirements which render it more tedious to make quick decisions to react to market changes in any integrated project.
For investors they can look forward to buying CapitaLand counter only, and be exposed to the residential, retail and commercial segments of the property market all at once.
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