Gordon Tang Offers to Buy Out Singapore’s Suntec REIT After Upping Stake

Mysterious mainland investor Gordon Tang and wife Celine have made an offer to acquire the remaining interest in Suntec REIT after the power couple and concert parties upped their stake in the Singapore-listed commercial trust this week.

Aelios, an investment holding company held equally by the Tangs, is offering S$1.16 per unit in cash for the Suntec REIT units it does not already own, according to a Thursday filing. The mandatory conditional offer was triggered after the Tang-led investor group bought enough units on Thursday to surpass the 30 percent ownership threshold, with the group’s holding in the trust having now reached 31.45 percent.

The offer is conditional on the Tang group acquiring more than 50 percent of units in the trust, whose S$12.2 billion ($9.1 billion) portfolio holds stakes in 10 office and retail properties in Singapore, Australia and Britain.

The S$1.16 offer price is in line with Wednesday’s close on the Singapore Exchange. The price rose 5.1 percent in Friday trading to close at S$1.23.

Valuation Questions

The Tang family is seeking to further consolidate its property empire after the clan privatised Singapore developers SingHaiyi and Chip Eng Seng in recent years and took over SGX-listed ARA US Hospitality Trust in July. This week, Tang-controlled OKH Global entered a deal to acquire the construction arm of Chip Eng Seng, now known as Acrophyte after the privatisation.

In a Friday research note, RHB urged unitholders to reject the Tangs’ bid for Suntec REIT, deeming the offer price a steep discount to both the net asset value and the brokerage’s target price.

“We believe the offer price of S$1.16 per unit severely undervalues the REIT, as it reflects a 44 percent discount to its NAV of S$2.07,” said RHB, which maintains a S$1.35 target price and a buy rating for Suntec REIT.

The brokerage pointed to the trust’s strong operational performance across the Singapore portfolio, with the flagship Suntec City mall and offices outperforming peers, and predicted a gradual recovery of the REIT’s overseas assets.

“The offeror also has stated its intention to maintain the listing status of the REIT,” RHB said. “The offer price will, however, set a share price floor at current levels and Suntec REIT will be a prime beneficiary of further rate cuts in 2025 due to its high gearing and low fixed hedge position.”

Empire Builders

A successful buyout of Suntec REIT would continue the streak of takeovers by the Tang family, the source of whose wealth has never been made public, with published accounts indicating that the couple have extensive dealings with the family of former Thai prime minister Thaksin Shinawatra.

The Tangs and their network of companies have also been active at the project level in Singapore, including taking a 21 percent stake during 2022 in the S$1.7 billion redevelopment of 8 Shenton Way in Tanjong Pagar through Chip Eng Seng, SingHaiyi and Haiyi Holdings.

In June of that year, SingHaiyi entered the top bid to acquire a residential plot along Katong’s Dunman Road via a public tender for S$1.28 billion.