Ascott Residence Trust and Ascendas Hospitality Trust enter combination deal to become Asia Pacific's largest hospitality trust with asset value of S$7.6 billion
BY ACCESSING THIS SECTION OF THE WEBSITE, YOU CONFIRM THAT YOU UNDERSTAND AND ACCEPT THIS DISCLAIMER. CLICK THE PLUS (+) SIGN TO READ THE TERMS OF THIS DISCLAIMER.
Proposed Combination (“Combination”) of Ascott Residence Trust (“Ascott Reit”) and Ascendas Hospitality Trust (“A-HTRUST”), as announced by Ascott Residence Trust Management Limited (“Ascott Reit Manager”), Ascendas Hospitality Fund Management Pte. Ltd. (“A-HTRUST REIT Manager”) and Ascendas Hospitality Trust Management Pte. Ltd. (“A-HTRUST BT Trustee-Manager”) on 3 July 2019 (“Joint Announcement”)
ACCESS TO THIS SECTION OF THE WEBSITE MAY BE RESTRICTED UNDER SECURITIES LAWS IN CERTAIN JURISDICTIONS. BY ACCESSING THIS SECTION OF THE WEBSITE, YOU CONFIRM CERTAIN MATTERS (INCLUDING THAT YOU ARE NOT RESIDENT IN SUCH A JURISDICTION) AS SET OUT BELOW. THE INFORMATION IS NOT DIRECTED AT, AND IS NOT INTENDED TO BE ACCESSED BY, PERSONS RESIDENT IN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION.
THIS SECTION OF THE WEBSITE CONTAINS INFORMATION (“INFORMATION”) PUBLISHED BY ASCOTT REIT AND/OR A-HTRUST RELATING TO THE COMBINATION IN COMPLIANCE WITH THE SINGAPORE CODE ON TAKE-OVERS AND MERGER (“CODE”). THE INFORMATION IS BEING MADE AVAILABLE IN GOOD FAITH AND FOR INFORMATION PURPOSES ONLY AND IS SUBJECT TO THE TERMS AND CONDITIONS SET OUT BELOW.
THE COMBINATION CANNOT BE VALIDLY ACCEPTED BY UNITHOLDERS OF ASCOTT REIT OR A-HTRUST OR ANY OTHER PERSONS BY MEANS OF ACCESSING THIS SECTION OF THE WEBSITE OR (IF APPLICABLE) DOWNLOADING A COPY OF THE ASCOTT REIT COMPOSITE DOCUMENT OR A-HTRUST SCHEME DOCUMENT (EACH AS DEFINED IN THE JOINT ANNOUNCEMENT) FROM THIS WEBSITE.
Access to the Information
Please read this notice carefully – it applies to all persons who view this section of the website and, depending on who you are and where you live, or depending on your address as shown on the register of unitholders of Ascott Reit or A-HTRUST, as the case may be, or in the records of The Central Depository (Pte) Limited (“CDP”), as the case may be, it may affect your rights. This notice and the information contained herein may be altered or updated from time to time, and should be read in full carefully each time you visit this part of the website.
The information contained herein is not for publication or distribution, directly or indirectly, in or into any jurisdiction where to do so would be unlawful or not be in compliance with the laws of such jurisdiction (“Restricted Jurisdiction”), and the availability of the Information (and any related offer) to unitholders whose addresses are outside Singapore, as shown on the register of unitholders of Ascott Reit or A-HTRUST (as the case may be), or in the records of the CDP (as the case may be) (“Overseas Unitholder”) may be affected by the laws of relevant overseas jurisdictions. Accordingly, all Overseas Unitholders should inform themselves about, and observe, any applicable legal requirements in their own jurisdictions.
The Information may not be downloaded or accessed by any person either in whole or in part from or within a Restricted Jurisdiction or where to do so would or may be unlawful or not be in compliance with the laws of any applicable jurisdictions.
The Information does not constitute or form part of an offer to sell or the solicitation of an offer to buy or subscribe to any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. In particular, the Information is not for distribution, directly or indirectly, in or into the United States. It is not an offer of securities for sale into the United States. The Consideration Units (as defined in the Joint Announcement) have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (“Securities Act”), or the securities laws of any state of the United States or other jurisdiction, and the Consideration Units may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. Any public offering of securities of Ascott Reit in the United States would be made by means of a prospectus that would contain detailed information about Ascott Reit and the Ascott Reit Manager, as well as financial statements. The Ascott Reit Manager does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.
If you are not permitted to view the Information on this website, or viewing the Information would result in a breach of the above, or you are in any doubt as to whether you are permitted to view the Information, please exit this web page.
The Information may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Ascott Reit Manager, the A-HTRUST REIT Manager and/or the A-HTRUST BT Trustee-Manager’s current view on future events.
Unless expressly stated otherwise, no statement contained or referred to in this section of the website is intended to be a profit forecast.
THE DOCUMENTS IN THIS SECTION OF THE WEBSITE MAY NOT BE DOWNLOADED, FORWARDED, TRANSMITTED OR SHARED WITH ANY OTHER PERSON EITHER IN WHOLE OR IN PART WHERE TO DO SO WOULD OR MAY CONSTITUTE A BREACH OF ANY APPLICABLE LOCAL LAWS OR REGULATIONS.
BY ACCESSING THIS SECTION OF THE WEBSITE, YOU CONFIRM THAT YOU UNDERSTAND AND ACCEPT THIS DISCLAIMER ON THE FOLLOWING TERMS:
I confirm that I am permitted to access this part of the website and that I am not (nor do I act on behalf of someone who is) resident in any country that renders the accessing of this area of the website or parts thereof illegal.
I agree that I will not forward, transfer or distribute (by any means including by electronic transmission) any documents included in this area of the website either in whole or in part to any person in any jurisdiction where such distribution may be restricted by applicable law or regulation.
I represent and warrant to Ascott Reit that I intend to access this area of the website for information purposes only, that I have read and understood this notice and that I understand that it may affect my rights or responsibilities.
I agree to be bound by the terms of the notice set out above and I confirm that I am permitted to access this part of the website.
1. What is the proposed Combination?
Ascott Residence Trust (“Ascott Reit”) and Ascendas Hospitality Trust (“A-HTRUST”) have announced a proposed combination (“Combination”), which will be effected by way of a trust scheme of arrangement, with Ascott Reit acquiring all the units in A-HTRUST for a consideration of S$1.0868 per A-HTRUST unit, comprising S$0.0543 in cash (5% of the consideration) and 0.7942 units in the new stapled Ascott Reit to be issued at S$1.30 per Ascott Reit stapled unit (95% of the consideration).
By way of illustration, if the trust scheme becomes effective in accordance with its terms, an A-HTRUST stapled unitholder will receive S$54.30 in cash and 794 units for every 1,000 A-HTRUST stapled units held by it as at the relevant books closure date.
The consideration implies a gross exchange ratio of 0.836x, which is based on the respective audited net asset value per unit of Ascott Reit and A-HTRUST. This reflects the underlying fundamental value of both entities.
2. What is the rationale for the proposed Combination?
There are various benefits arising from the proposed Combination.
Proxy Hospitality Trust in Asia Pacific
The proposed Combination will consolidate Ascott Reit’s position as the largest hospitality trust in Asia Pacific with total assets of approximately S$7.6 billion (as at 31 March 2019), making it the proxy hospitality trust in the region.
With an increased EBITDA contribution from developed markets and a ~50% increase in free float, the proposed Combination will facilitate Ascott Reit’s inclusion into the FTSE EPRA Nareit Developed Index, which may potentially result in a positive re-rating of Ascott Reit’s unit price, a wider investor base and higher trading liquidity.
The proposed Combination will also strengthen Ascott Reit’s financial position, giving it greater capacity to drive growth. With greater size, the post-combination Ascott Reit (“Combined Entity”) will have better access to growth opportunities and increased capacity to undertake more development / conversion projects. With a higher development limit and debt headroom of S$1.0 billion, the Combined Entity will have greater financial flexibility to pursue potential investment opportunities.
The enlarged portfolio will comprise 88 properties with more than 16,000 units across 39 cities in 15 countries in Asia Pacific, Europe and the USA.
The proposed Combination is slated to enhance portfolio diversification and resilience through:
· Strengthening Ascott Reit’s presence in Asia Pacific where demand for business and leisure travel remains robust
· Adding freehold properties to increase the proportion of freehold assets by 8% to 61% of the total portfolio valuation
· Maintaining a balanced portfolio of stable and growth income
· Reducing earnings concentration risk as each country will have <20% contribution to total gross profit
DPU-accretive to unitholders
On a pro forma basis, the distributable income per unit ("DPU") for Ascott Reit’s unitholders will increase from 7.16 cents to 7.34 cents, translating to a DPU accretion of 2.5%. For A-HTRUST, the pro forma DPU will increase from 6.03 cents to 6.14 cents, representing an accretion of 1.8%.
3. Is the proposed Combination subject to approvals from unitholders and/or other authorities or regulatory bodies?
Yes, approvals will be sought from the unitholders of Ascott Reit and A-HTRUST at their respective extraordinary general meetings (“Meetings”) which will take place around October 2019. The Scheme is also subject to Court approval and approvals from certain other regulatory bodies, including the Monetary Authority of Singapore, the Securities Industry Council, the Singapore Exchange Securities Trading Limited and the Treasurer of the Commonwealth of Australia.
4. What has been done to ensure that the interests of minority unitholders are protected?
With respect to minority unitholders of Ascott Reit: the proposed transaction is subject to the approval by more than 50% of the unitholders of Ascott Reit present and voting at the relevant Ascott Reit Meeting. Interested parties, including CapitaLand entities, are required to abstain from voting on the resolutions in relation to the Combination.
With respect to minority unitholders of A-HTRUST: the proposed transaction is subject to the approval by a majority in number of unitholders of A-HTRUST representing at least 75% in value of the unitholders of A-HTRUST present and voting at the relevant scheme meeting. Concert parties of Ascott Reit, including CapitaLand entities, are required to abstain from voting on the resolutions in relation to the Combination.
Independent Financial Advisors Australia and New Zealand Banking Group Limited and Deloitte & Touche Corporate Finance Pte Ltd have been appointed by Ascott Reit and A-HTRUST respectively to opine on whether the Combination is, in the case of Ascott Reit, on normal commercial terms and not prejudicial to the interests of Ascott Reit and its minority unitholders, and, in the case of A-HTRUST, fair and reasonable.
5. What is the Ascott Reit Stapling Scheme and how does it affect me?
As A-HTRUST has a stapled structure, to effect the Combination, Ascott Reit will have to establish a business trust and adopt a stapled structure via a stapling scheme.
The Ascott Reit Scheme comprises the steps below:
i. Ascott Reit will establish a business trust (“Ascott BT”)
ii. Each unit in Ascott BT will be stapled to one unit in Ascott Reit, to form one Ascott Reit-BT stapled unit
iii. Pursuant to the Combination, the A-HTRUST REIT will become a sub-trust of Ascott Reit, and the A-HTRUST BT will become a sub-trust of Ascott BT
As a unitholder of Ascott Reit, you will be issued one unit in Ascott BT for each unit in Ascott Reit that you own, and the unit in Ascott BT will be stapled with the unit in Ascott Reit. This structure does not affect the value of your investment and there is no effective difference in the manner the stock is traded.
6. Will the issue price of S$1.30 per Ascott Reit unit change? Are there clauses that allow for an adjustment of the issue price should there be a significant price change on the downside?
There will not be any adjustments to the offer price for the units in A-HTRUST or the issue price of the units in Ascott Reit arising from changes in the trading prices.
7. When is the Combination expected to complete?
The Combination is expected to complete by 2019. The timetable is indicative only and is subject to change.
8. What do unitholders need to do in relation to the proposed Combination?
Unitholders will be required to vote on the Combination either in person at the Meetings or by submitting a proxy form.
The Ascott Reit Composite Document* will be issued to unitholders at a later date. Following which, a Meeting will be convened for the unitholders of Ascott Reit. Details on the Meeting will be made available at a later date. The timetable is indicative only and is subject to change.
*Ascott Reit Composite Document means the document setting out details of, amongst other things, (a) the Ascott Reit Scheme and (b) the Ascott Reit Acquisition (each as defined in the announcement dated 3 July 2019 in relation to the Combination (“Joint Announcement”).
Questions Specific to A-HTRUST Stapled Unitholders
9. As a stapled unitholder in A-HTRUST, how much cash consideration and consideration units am I entitled to?
You will receive a consideration of S$1.0868 per A-HTRUST unit, comprising S$0.0543 in cash (5% of the consideration) and 0.7942 units in the new stapled Ascott Reit to be issued at S$1.30 per Ascott Reit stapled unit (95% of the consideration).
By way of illustration, if the trust scheme becomes effective in accordance with its terms, you will receive S$54.30 in cash and 794 units for every 1,000 A-HTRUST stapled units held as at the relevant books closure date.
Note: The aggregate Cash Consideration to be paid to each A-HTRUST stapled unitholder shall be rounded to the nearest S$0.01. The number of Consideration Units which each A-HTRUST stapled unitholder shall be entitled to pursuant to the A-HTRUST Scheme, based on the number of the A-HTRUST stapled units held by such A-HTRUST stapled unitholder as at the A-HTRUST Scheme Entitlement Date, shall be rounded down to the nearest whole number, and fractional entitlements shall be disregarded.
10. Between the announcement and completion of the Combination, will I still receive distributions from A-HTRUST? When can I expect the distributions to be paid to me?
Yes. The managers of A-HTRUST are entitled to declare, pay or make distributions for (amongst other things) the period from 1 April 2019 up to the day immediately before the effective date of the scheme (“Effective Date”), including any clean-up distributions in respect of the period from the day following the latest completed financial half year of A-HTRUST preceding the Effective Date up to the day immediately before the Effective Date.
A-HTRUST unitholders can therefore expect to receive the regular half-yearly distribution following the announcement of A-HTRUST’s financial results as at 30 September 2019. The payment date of such distributions will be announced in due course.
According to Schedule 5 of the Joint Announcement, the indicative Effective Date is expected to be in November 2019. This timetable is indicative only and is subject to change.
Questions Specific to Ascott Reit Unitholders
11. Following the Combination, Ascott Reit will have a stapled structure. What does this mean to me, and how does it affect my investment?
As a unitholder in Ascott Reit, you will be issued one unit in Ascott BT for each unit in Ascott Reit that you own, and the unit in Ascott BT will be stapled with the unit in Ascott Reit. This structure does not affect the value of your investment and there is no effective difference in the manner the stock is traded.
Please refer to question 5 for more details on the stapling scheme.
12. Between the announcement and completion of the proposed Combination, will I still receive distributions from Ascott Reit? When can I expect the distributions to be paid to me?
Yes. The manager of Ascott Reit is entitled to declare, pay or make distributions for (amongst other things) the period from 1 January 2019 up to the day immediately before the Effective Date, including any clean-up distributions in respect of the period from the day following the latest completed financial half year of Ascott Reit preceding the Effective Date up to the day immediately before the Effective Date.
Ascott Reit unitholders can therefore expect to receive the regular half-yearly distribution following the announcement of Ascott Reit’s 1H 2019 financial results as at 30 June 2019. The distribution will be paid on 29 August 2019.
According to Schedule 5 of the Joint Announcement, the indicative Effective Date is expected to be in November 2019. This timetable is indicative only and is subject to change.
Have a question that we have not addressed? Email us at email@example.com and we will get back to you. Or contact us at Tel: +65 6713 2888, Mondays to Fridays from 9am to 6pm.
The directors of the Ascott Reit Manager (including those who may have delegated detailed supervision of the information set out in this section of the website (“Information”)) have taken all reasonable care to ensure that the facts stated and opinions expressed in the Information which relate to Ascott Reit and/or the Ascott Reit Manager (excluding those relating to A-HTRUST and/or the A-HTRUST REIT Manager and/or the A-HTRUST BT Trustee-Manager) are fair and accurate and that there are no other material facts not contained in the Information the omission of which would make any statement in the Information misleading. The directors of the Ascott Reit Manager jointly and severally accept responsibility accordingly.
Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from A-HTRUST and/or the A-HTRUST REIT Manager and/or the A-HTRUST BT Trustee-Manager, the sole responsibility of the directors of the Ascott Reit Manager has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in the Information. The directors of the Ascott Reit Manager do not accept any responsibility for any information relating to A-HTRUST and/or the A-HTRUST REIT Manager and/or the A-HTRUST BT Trustee-Manager or any opinion expressed by A-HTRUST and/or the A-HTRUST REIT Manager and/or the A-HTRUST BT Trustee-Manager.