CapitaLand and Ascendas-Singbridge in S$11-billion deal to create Asia’s largest diversified real estate group
1. What is the proposed transaction?
CapitaLand Limited (“CapitaLand”) has entered into a transaction with Temasek to acquire from its subsidiary, Ascendas-Singbridge Pte Ltd (“ASB”), all the shares in the two wholly-owned subsidiaries of ASB. The proposed transaction is valued at approximately S$11 billion and is subject to approval by CapitaLand’s independent shareholders at an Extraordinary General Meeting (“EGM”), expected to be convened by 1H 2019.
2. What is the rationale for the proposed transaction?
The proposed transaction will create the largest diversified real estate group in Asia (the “Group”). The combined total assets under management (“AUM”) of the Group will exceed S$116 billion. The Group’s expanded asset classes will include logistics/business parks, industrial, lodging, commercial, retail and residential. Its geographical presence will span more than 180 cities across 32 countries. In addition, the Group will leapfrog CapitaLand’s Year 2020 AUM target of S$100 billion, putting it amongst the top 10 real estate investment managers globally; as well as the manager of the three largest real estate investment trusts (REITs) listed on the Singapore Exchange, namely Ascendas Real Estate Investment Trust, CapitaLand Mall Trust and CapitaLand Commercial Trust.
As a result, the proposed transaction brings numerous benefits including:
A. Augments strengths within existing core markets of Singapore and China
B. Achieves immediate scale in growth markets such as India, Vietnam, USA and Europe, and new sectors including logistics and business parks exposed to new economy growth
C. Accelerates growth of income with multiple drivers through the fund management platform, development pipeline, investment properties and best-in-class operating platforms
D. Increases competitiveness with enhanced scale and depth to offer the most comprehensive solutions to its clients through harnessing technology and building on the Group’s enlarged international network of customers
3. What are the proposed terms of the transaction?
Under the terms of the agreement, Temasek will receive approximately S$6.0 billion, which will be satisfied 50% in cash (S$3.0 billion) and 50% in new CapitaLand shares (S$3.0 billion). The shares will be priced at S$3.50 per share, representing a premium of 11.3%, or approximately S$0.36, over CapitaLand’s one-month volume weighted average price of S$3.1447.
The consideration takes into account the adjusted net asset value of ASB, which includes the value of its fund management platform and the trading value of its three sponsored listed trusts.
4. How will the cash portion of the consideration be funded?
The cash portion of the proposed transaction will be funded from debt and other financing alternatives. CapitaLand does not intend to issue additional new shares to finance the cash portion of the proposed transaction, other than shares to be placed with Temasek as part of the consideration.
5. What has been done to ensure the interests of CapitaLand’s independent shareholders?
An Independent Financial Advisor (“IFA”) to CapitaLand’s independent directors will be appointed. The IFA report will be released together with the shareholders’ circular ahead of the EGM.
The proposed transaction is subject to approval by a majority of independent shareholders in the EGM. Temasek and its associates and/or concert parties (as applicable) would not be able to vote on the resolutions at the EGM.
6. Is the proposed transaction subject to approvals from shareholders and/ or other authorities or regulatory bodies?
Yes, approval of the proposed transaction will be sought from the independent shareholders of CapitaLand.
As the proposed transaction will trigger an obligation on Temasek to make a mandatory general offer for the shares in CapitaLand which it does not own, a whitewash resolution will be tabled at the EGM to seek the approval of CapitaLand shareholders to waive their right to receive the offer from Temasek.
Temasek, its associates and/or concert parties (as applicable) will abstain from voting in respect of the resolutions tabled at the EGM as required by the Securities Industry Council and under the Listing Manual.
Full details and explanation of the proposed transaction and its implications will be included in the shareholder circular to be sent in due course, which will include the IFA report and the valuer report. In addition, the completion of the proposed transaction is subject to the receipt of approvals from certain agreed regulatory authorities in respect of the proposed transaction.
7. When is the EGM?
EGM is expected to be held by 1H 2019. Further details of the EGM will be set out in the circular to despatched to shareholders of CapitaLand in due course.
8. When will the proposed merger be completed if the necessary approvals are obtained?
We expect to complete the proposed transaction by 3Q 2019.
9. What is Temasek’s shareholding post completion of proposed transaction?
Temasek’s ownership of CapitaLand will increase from approximately 40.8% to about 51.0% upon the close of the proposed transaction.
10. Will CapitaLand be making any offer to acquire the units in the Listed Trusts that are not already held by ASB?
CapitaLand is not required to make any chain offers for ASB’s listed trusts as a result of the proposed transaction.
11. Would there be an impact on dividends for CapitaLand shareholders?
There is no change to CapitaLand’s dividend policy.
12. Is any action required of CapitaLand shareholders in the meantime?
You should read the shareholder circular and IFA report which will be sent to you in due course. If you are unable to attend the EGM, please respond by mailing your completed and signed proxy card in the enclosed return envelope so that your proxy will be entitled to vote your shares at the EGM.
13. Have a question that we have not addressed?
Email us at firstname.lastname@example.org and we will get back to you. Or contact us at Tel: +65 6713 2883, Mondays to Fridays during office hours.
 The two subsidiaries, Ascendas Pte Ltd (APL) and Singbridge Pte Ltd (SB), are the holding companies of the business of ASB. APL holds business space and industrial development platforms and fund management platforms; and SB holds the joint ventures for large scale urban development projects.
 As measured based on publicly available AUM information for diversified real estate developers in the Asia Pacific region.
 Source: IPE Real Estate Top 100 Investment Management Survey 2018 (as of 30 Jun 2018)