Volare Group has made an offer to acquire a 10 percent stake in Sabana Industrial REIT, a deal that would build on the Swiss conglomerate’s current 5.4 percent interest in the Singapore-listed trust.
Volare, whose business lines include real estate, fossil fuels and car washes, is offering 46.5 Singapore cents in cash for 10 percent of the issued units in Sabana REIT, according to a late Friday filing with the Singapore Exchange. The bid values the trust at S$509.7 million ($386.5 million).
The offer price represents a 9.4 percent premium to the volume-weighted average price per unit in Friday trading and a 6.9 percent markup to the VWAP in the 180-day period preceding the announcement date. The offer also carries a more than 23 percent premium to the implied price in 2020’s failed merger with ESR-REIT that valued Sabana REIT at S$397 million.
“The partial offer by the offeror is for investment purpose as the offeror wishes to diversify its business lines away from fossil fuels and increasingly build up its real estate portfolio,” Volare’s financial advisor, RHT Capital, said in the filing.
Sabana REIT comprises a portfolio of 18 industrial properties in Singapore. The trust’s total assets were assessed at more than S$900 million as of 31 December 2021.
The other substantial unitholders in the REIT are Hong Kong-listed industrial giant ESR, with its 20 percent stake, and activist investor Quarz Capital Asia, with 13 percent.
Quarz Capital, which had backed a previously proposed merger of Sabana REIT and ESR-REIT (now ESR-Logos REIT) at 54.5 Singapore cents a unit in 2019 but opposed ESR-REIT’s final offer of 37.7 Singapore cents, hailed Volare’s “attractive” offer.
“Unitholders get to eat twice — pocket the coming dividend and also tender at the attractive offer,” Quarz head of research Havard Chi told the Straits Times.
As far back as 2017, ESR had sought to buy Sabana REIT as part of a grand scheme to consolidate the region’s fragmented industrial trust ecosystem, but acquisition talks were terminated that year.
In 2019, ESR struck a series of deals to boost its stake in Sabana REIT to 21.4 percent and its interest in the trust’s manager to 93.8 percent.
Sabana REIT’s manager reported last July that the trust posted a distribution per unit of S$0.0159 for the first six months of 2022, up 7.4 percent year-on-year, amid proactive leasing efforts.