Sime Darby's plan to acquire Saizen REIT via RTO may have fallen through

KUALA LUMPUR (Oct 4): Sime Darby Bhd's plan to acquire a majority stake in Saizen Real Estate Investment Trust (Saizen REIT) through a reverse takeover (RTO) appears to have fallen through.

In a filing with Bursa Malaysia today, Sime Darby said its framework agreement signed with Japan Residential Assets Manager Ltd, the manager of Saizen REIT, on Aug 15 to acquire a majority stake in the Singapore-based REIT by injecting Sime Darby's Australian industrial property into the trust in exchange for more than 30% stake in the enlarged capital of Saizen REIT has lapsed.

"(This is) in view that the definitive agreements for the properties disposal have not been entered into as of the long-stop date of Sept 30," the group said.

Under the RTO arrangement, Sime Darby's subsidiary Hastings Deering (Australia) Ltd (HDAL) will sell some of its industrial properties in Australia to Saizen REIT, which would be eventually master leased to HDAL. Another Sime Darby subsidiary Sime Darby Property Singapore Ltd (SDPSL) will be issued new units at 3.484 Singaporean cents (11 sen) per unit in Saizen REIT as part of the Saizen REIT RTO by Sime Darby.

In addition, Japan Residential Assets Manager will sell 80% interest in the manager to SDPSL, and there is a call option for the remaining 20% equity interest any time after 24 months from the completion period.

As the issuance of new Saizen REIT units will lead to SDPSL owning more than 30% stake, triggering the mandatory general offer for all the remaining issued units not owned, SDPSL intends to make an application to the Singapore's Securities Council for a waiver.

In today's filing, Sime Darby said however, SDPSL and HDAL are continuing to be in discussion with Japan Residential Assets Manager.

"If the parties are able to resolve outstanding matters, SDPSL and HDAL may enter into the definitive agreements," it added.

It was estimated that Saizen REIT's market capitalisation will be at least S$300 million following the completion of the asset injection exercises.

At 2.33pm, Sime Darby shares traded up five sen or 0.65% at RM7.70, with 710,600 shares done for a market capitalisation of RM48.65 billion. — theedgemarkets.com

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