It has also demanded that Quarz and Black Crane explain statements they had previously made about Sabana Reit's 2021 standalone distribution per unit potentially rising 20 per cent.
By contrast, ESR-Reit's closing price on Friday of S$0.385 is only 2 per cent below its NAV, as at June 30, of S$0.41 per share. On those terms, and the level at which ESR-Reit is now trading, each unit of Sabana Reit would be valued at more than S$0.421, which is 20.3 per cent above its current market price and 19.2 per cent below its NAV per share.
ESR-Reit has 57 properties with total gross floor area of 15.1 million sq ft and total assets of S$3.2 billion. Sabana Reit has just 18 properties with a GFA or 4.1 million sq ft, and total assets of S$0.9 billion. The combined Reit will be more than four times as large as Sabana Reit, but only about 30 per cent larger than ESR-Reit.
My view is that the manager of Sabana Reit and its advisers ought to have known better than to unveil a merger without having ensured that key unitholders were onside.Faced with determined dissident investors, and with no wiggle room on the terms of the merger, the manager of Sabana Reit has tried desperately to counter criticism of the deal, to the point of downplaying the Reit's standalone potential.