Saizen REIT

[tanjm]

I will vote against it. Lone star are getting a fully formed real estate fund at a high yield in yen terms. 3.4% premium over a June 2015 NAV is too cheap.

[tanjm]

Where there is one suitor, there will be others. Shareholders should be patient and not accept the first offer that comes along. The problem I see is some people will just see the premium over share price.

[tanjm]

i just realized something. Saizen reit is holding 5 bio yen of cash at the group level as of last financial report. That's about 20 cents SGD per share.

The statement from Saizen is ambiguous. On one hand, it says the offer is for the real estate (encapsulated in the holding co or the TK operators), on the other hand, it references the NAV (which typically includes cash).

If the offer from lone star excludes cash, including any accruing till deal closure, then its not a bad deal. I should think the offer should normally exclude cash because the cash is being held at the holding company level and this offer is not a company takeover offer but a asset offer.

Anyone thinks differently?

[CityFarmer]

i just realized something. Saizen reit is holding 5 bio yen of cash at the group level as of last financial report. That's about 20 cents SGD per share.

The statement from Saizen is ambiguous. On one hand, it says the offer is for the real estate (encapsulated in the holding co or the TK operators), on the other hand, it references the NAV (which typically includes cash).

If the offer from lone star excludes cash, including any accruing till deal closure, then its not a bad deal. I should think the offer should normally exclude cash because the cash is being held at the holding company level and this offer is not a company takeover offer but a asset offer.

Anyone thinks differently?

I know little on the deal, but I knew a bit on SGX Rules. The overall NAV is always used in disposal announcement, for Rules compliance. It has nothing to do with the disposed asset.

(hope it helps to clear some doubt)

[Ray168]

Side track is bit ...

If overall NAV is always used in disposal, then First Reits price still has ~20% downside risk and LippoMall has ~17% upside gain.

IMO, it is not always the case.

[zerobeta]

can someone explain the deal to me?
how did they arrive at SGD 1.17 offer price? has it included all fees and expenses? does it include only the borrowings or all the liabilities? if the exchange rate changes will the offer price in SGD change also?

[touzi]

i just realized something. Saizen reit is holding 5 bio yen of cash at the group level as of last financial report. That's about 20 cents SGD per share.

The statement from Saizen is ambiguous. On one hand, it says the offer is for the real estate (encapsulated in the holding co or the TK operators), on the other hand, it references the NAV (which typically includes cash).

If the offer from lone star excludes cash, including any accruing till deal closure, then its not a bad deal. I should think the offer should normally exclude cash because the cash is being held at the holding company level and this offer is not a company takeover offer but a asset offer.

Anyone thinks differently?

If cash is excluded from the takeover, shouldn't debts be excluded as well? Unit holders are not going to get additional 20 cents per unit. If I add back the 1,479 Mil Yen premium to the Financial Statement, the NAV worked out to be about 108 Yen per unit or SGD 1.26. Is that what we can expect to get if cash is excluded from the takeover net of everything?

[tanjm]

The cash is at group level. The debt is at TK level.

[touzi]

The cash is at group level. The debt is at TK level.

According to the 2015 AR, there is 1+16 Bn JPY (Current and Non Current) of borrowing at Group level. At the REIT level, there is only 363 Mil JPY. Not sure if I am interpreting it correctly.

[thor666]

I will vote against it. Lone star are getting a fully formed real estate fund at a high yield in yen terms. 3.4% premium over a June 2015 NAV is too cheap.

I agreed with u but I suspect most will vote for rather than against it.
As u rightly pointed out, the formation of a complete fund has worthy value. A higher premium would be more palatable.

(Not vested)


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