Frasers Hospitality Trust Heading Towards Privatisation After Lopsided Unitholder Vote

After falling short by a paper-thin margin almost three years ago, Frasers Property has cleared a key hurdle in its quest to privatise Singapore-listed Frasers Hospitality Trust, as unitholders decisively approved the scheme at a meeting late last week.

The property group controlled by Thai alcohol tycoon Charoen Sirivadhanabhakdi and its concert parties abstained from the vote, which saw their offer of S$0.71 per stapled security accepted by over 86 percent of disinterested holders, representing 99.2 percent of the units held by those who participated — easily beating the threshold of 75 percent of units for passage.

The proposed buyout values FHT at S$1.37 billion ($1.1 billion) and is aimed at maximising and realising value for investors in the 14-asset REIT, according to Eric Gan, CEO of the trust’s managers.

“We will now focus on taking the necessary steps to complete the transaction so that stapled securityholders can receive their funds in a timely manner,” Gan said Friday in a release.

Second Time Lucky

In the previous exercise during September 2022, the take-private scheme for FHT was approved by unitholders representing 74.88 percent of the trust’s stapled securities, narrowly missing the 75 percent threshold.

Frasers Property contended at the time that the hospitality sector’s bumpy recovery, growing market uncertainties and FHT’s small size relative to peers justified a S$1.35 billion (then $970 million) takeover.

The concert parties in the latest bid included SGX-listed Frasers Property and its parent firm, Charoen’s Bangkok-based TCC conglomerate. The two entities together hold more than a 60 percent interest in FHT, whose 3,477-key portfolio was valued at S$2 billion as of 30 September 2024.

While the offer of S$0.71 per unit represents a 7 percent premium to FHT’s last traded price before the bid was proposed in May, it’s still 19.3 percent below the trust’s IPO price of S$0.88. The managers announced last month that they had received an in-principle nod from the Singapore Exchange to delist FHT’s units, pending the decision of the stapled securityholders.

Tycoon Ties Up Loose Ends

The latest milestone for Thailand’s Sirivadhanabhakdi clan comes after SGX-listed Frasers Centrepoint Trust earlier this year acquired the remaining half of a Singapore mall complex that it didn’t already own for S$1.17 billion ($880 million). The seller of Northpoint City’s south wing was a trust jointly held by FCT sponsor Frasers Property, Charoen and the estate of the billionaire’s late wife.

Frasers Property’s largest shareholder, the Charoen-controlled private firm TCC Assets, secured an 86.89 percent stake in the SGX-listed developer following last year’s share swap deal with ThaiBev, the Bangkok-headquartered drinks company founded by Charoen.

The 81-year-old patriarch stepped down from his role as Frasers Property chairman in February and received the honorary title of chairman emeritus. Four months later, he doled out stakes in holding firms that control 66 percent of ThaiBev to his five children, including Frasers Property CEO Panote Sirivadhanabhakdi.