Frasers Hospitality Trust Privatisation Fails as Vote Falls Just Short

Frasers Property’s take-private scheme for Singapore-listed Frasers Hospitality Trust came up short by the barest of margins at a Monday vote, as unitholders representing 74.88 percent of the trust’s stapled securities approved the proposal, narrowly missing the 75 percent threshold for passage.

The property group controlled by Thai alcohol tycoon Charoen Sirivadhanabhakdi had offered S$0.70 in cash per share to take over the hotel and serviced apartment trust, arguing that the sector’s bumpy recovery, growing market uncertainties and FHT’s small size relative to peers justified a S$1.35 billion ($970 million) buyout.

“We would like to thank our stapled securityholders who have voted and we respect their decision and the outcome of the meetings,” Eu Chin Fen, CEO of the trust’s managers, said Monday in a release. “While we believe that the privatisation has its merits, stapled securityholders have expressed their preference for FHT to remain listed and we are heartened by their support and confidence for FHT.”

FHT units on the Singapore Exchange closed at S$0.55 in resumed trading on Tuesday, down almost 23 percent from their last price on Friday.

Scheme Lapses

In a separate statement on Monday, FHT acknowledged the termination of the privatisation scheme’s implementation agreement and gave no indication that Frasers would make a revised offer for the trust.

“We shall remain focused to ride on the gradual recovery trajectory and navigate through the challenges and opportunities ahead of us,” Eu said. “We continue to stay committed to create and deliver long-term value to our stapled securityholders.”

Singapore-listed Frasers Property had sought to buy the units it does not already own and increase its stake in FHT to 63.28 percent from 25.8 percent at present, with Charoen’s Bangkok-based TCC Group conglomerate maintaining its 36.72 percent interest.

Frasers Property’s offer of S$0.70 per unit, announced in mid-June, was still 20.5 percent below FHT’s IPO price of S$0.88.

Rocky Return Trip

The failed takeover bid marks a setback for Eu, who in April of last year was named chief executive of the managers of FHT, a stapled group comprising Frasers Hospitality REIT and Frasers Hospitality Business Trust.

Eu had held the same title from when FHT was listed in 2014 until 2019, when she turned over the chair to Colin Low and took on her most recent previous position as chief investment officer of Frasers Hospitality International Pte, the hotel and serviced residence division of Frasers Property.

Consisting of 14 hotels and serviced residences across Asia, Australia and Europe, FHT’s portfolio is valued at S$2 billion and includes the 406-room InterContinental hotel at Singapore’s Bugis Junction and the 380-unit Novotel Melbourne on Collins. The trust also holds Fraser Suites serviced apartment complexes in Australia, Singapore and the UK.